Spotify begins trading amid Wall Street tech rout

Spotify begins trading amid Wall Street tech rout

Spotify begins trading amid Wall Street tech rout

Do not forget to update your bookmarks.

It, along with other notable music streaming services, have changed the way the music industry makes money by giving users access to large libraries of music.

CNet reports that the streaming service went public on Tuesday, trading under the moniker SPOT on the New York Stock Exchange. The Swedish company's use of a "direct listing" allows its early investors and employees to sell as many shares as they want whenever they want.

The Swedish company began trading at an opening price of $165.90 per share, almost 26 per cent above the reference price, before slipping back a little.

According to Spotify CEO Daniel Ek, Spotify's IPO doesn't need to be a "splash".

Ek appeared to acknowledge the difficulties facing the company in his blog post, writing: "I have no doubt that there will be ups and downs as we continue to innovate and establish new capabilities". Nothing ever happens in a straight line - the past ten years have certainly taught me that.

In an attempt to pay homage to Spotify's going public, the NYSE meant to pay homage to the company's Swedish homeland.


The company also said it aimed to boost its subscriber numbers by 30 to 36 percent this year.

By comparison, Apple's almost 3-year-old music streaming service has 38 million subscribers.

"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". By shading the traditional structure of hiring Goldman Sachs and Morgan Stanley to parade their unprofitable business model to a bunch of thirsty rubes, Spotify has essentially looked lame old Uncle Wall Street and moaned "Can I LIVE?!". While Spotify's cumulative number of paid subscribers is growing, it's not growing as fast as Apple Music's.

Neil Wilson, senior market analyst at ETX Capital, warned that the company's public listing "probably comes at about the worst possible moment for sellers of stock".

Cresset Wealth Advisors' Jack Ablin on the state of the markets and Spotify going public at the NYSE.

Unlike Netflix, Spotify still isn't profitable, having lost more than 2.4 billion euros ($3 billion) since it started more than a decade ago.

Drew Pascarella, lecturer of finance at Cornell SC Johnson College of Business, says that Spotify's unorthodox listing is a one-off, unique situation as the company does not resemble classic pre-IPO firms. 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. But what's even more important to me is that tomorrow does not become the most important day for Spotify.

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