Spotify begins public trading under symbol SPOT

Microsoft Senior VP of Entertainment Music & Gaming Jason Rutherford during a media presentation in Redmond WA. March 30th 2018

However, as The Guardian points out, it's hard to value the music streaming firm because in its 12 years of existence, it's never turned a profit, despite the fact that it now has 157 million listeners, of which 71 million are paying subscribers. Spotify lost about $1.5 billion in 2017, more than double its loss from the prior year. "Such differences from an underwritten initial public offering could result in a volatile market price for our ordinary shares and uncertain trading volume and may adversely affect your ability to sell your ordinary shares".

The difficulty in setting the price is likely related to the unusual nature of Spotify's offering.

In the US, subscribers can pay $9.99 per month for a standard music streaming plan, or $14.99 for a family plan with up to five accounts. "Spotify is hemorrhaging from the costs of licensing content", said Michael Carvin, chief executive of personal finance technology firm SmartAsset.

The public listing came after more than three hours of discussion among traders who struggled to set a price of the company: according to reports, it's the latest open for a NYSE-listed stock ever, beating out retail giant Alibaba which began trading just before noon in 2014. Seeking to take the company to the next level, the Swedish-based company signaled its intention to go public this past February. Instead, it's completing a direct listing. It surpass Apple Music, Pandora, Google Play Music, Amazon Music Unlimited, Tidal and iHeart Radio, among others.

Spotify made its debut on Wall Street Tuesday via what many are calling an unusual "direct listing".




Spotify's opening public price was determined by buy and sell orders collected by the NYSE from broker-dealers.

"Officially we are not even calling it an IPO", says Matt Kennedy, an analyst at Renaissance Capital, which manages IPO-focused exchange-traded funds.

But analysts pointed out the listing saved Spotify tens of millions in fees and gave employees and early investors a chance to cash out.

Ahead of Spotify going public, CEO Daniel Ek on Monday published a blog post celebrating the occasion while also explaining why the company opted to go public via a direct listing as opposed to a traditional IPO. If it were a typical IPO, they'd have to wait for a share lockup period to end to sell their stock. "Most companies do fall after their IPO, but the difference is that there is no underwriter to stabilize the price", he said. Spotify subscriptions, meanwhile, are growing by an average of 2 percent per month. It will not have some of the safeguards traditionally provided by investment banks, which try to prevent new stock from following below a certain price. That could make it even more hard for investors to settle on the right price for Spotify's stock, they say.

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