Valued at as much as $30 billion, Spotify made its debut on the NYSE under the stock symbol SPOT opening at $165.90 before closing at $149.01. It’s dropped a little during after hours trading but not much.
The reference price was $132, and this is entirely based on investor demand. As such it dropped from 25% over reference in initial trading to only about 13% over what they wanted.
The offering was a direct listing, meaning no banks underwrote it and no price was set ahead of the offering. Your traditional offering would have been an IPO, not Spotify.
It is currently far and ahead the leading paid streaming service on the planet with 71 million paid subscribers, but it still managed to lose $460 million last year.
My guess is investors are hoping that the cash infusion will somehow make Spotify more equitable as there doesn’t appear to be a whole lot of profit to be made for a few years looking at previous operating losses.
I’m interested to see where this goes. This reminds me of the early days of Amazon where you were purchasing a slowly hemorrhaging company that said it would get there eventually. Amazon did it, maybe Spotify?