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Spotify valued at $30bn in Wall Street debut

Spotify made its stock market debut on Tuesday, valuing the loss-making music streaming service at more than $30bn.
Its stock opened at $169.90, up more than 25%, before slipping back to close at $149.01. On Monday, the New York Stock Exchange set the company's stock reference price at $132.The Swedish company took an unusual step listing directly onto the New York Stock Exchange, which could make the stock volatile.Typically, companies seeking a stock market listing hire investment banks to sell shares on their behalf and brokers help match buyers and sellers to make sure that the stock does not have a volatile debut.:: Analysis: Why is Spotify taking this unorthodox route to market?"Spotify is floating on the stock market at a pretty inauspicious time for the tech industry, which has been rocked by the Facebook data scandal and now potentially faces greater regulation as a result," said Laith Khalaf, senior analyst, at Hargreaves Lansdown."Donald Trump's tweeted attacks on Amazon don't help lift sentiment towards the sector either."Despite the downbeat mood music, Spotify shares changed hands on the market at a substantial premium to the highest price previously paid in private transactions, indicating significant investor demand for the stock."
Spotify valued at $30bn in Wall Street debut

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Daniel Ek, CEO of Swedish music streaming service Spotify, expects a volatile ride for the company
While existing shareholders and employees can sell their shares, Spotify chose not to sell any new shares.At the opening price, its 35-year-old founder Daniel Ek is worth $2.8bn (€2bn).The Stockholm-based company began streaming music about 12 years ago but still hasn't made a profit as it pays out royalties to musicians for the privilege of sharing their music.In fact, it has lost more than €2.4 billion (€2.1bn) over that period.
Spotify is focused on building its subscriber base. It has about 71 million paying customers and hopes to increase that to 96 million.
Spotify valued at $30bn in Wall Street debut

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What is the future for Spotify?
It faces tough competition from the second-largest streaming company Apple Music, which has 38 million subscribers.Google and Amazon are also attempting to muscle in on Spotify's business."The attraction of the music-streaming service probably lies in Spotify's strong market share and rapidly growing revenues," Khalaf said."It may be some time before Spotify actually turns a profit though, as the company is resolutely prioritising growth over profit, and will be channelling money into investing in services and building further scale."Spotify's Ek acknowledged before the listing that it could be a volatile ride for the company."I have no doubt that there will be ups and downs as we continue to innovate and establish new capabilities," Ek said in a blog post on Monday."Nothing ever happens in a straight line - the past ten years have certainly taught me that."Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years.
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"Normally, companies ring bells. Normally, companies spend their day doing interviews on the trading floor touting why their stock is a good investment."Normally, companies don't pursue a direct listing. While I appreciate that this path makes sense for most, Spotify has never been a normal kind of company."
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