Spotify shares jump 13% on stock exchange debut

Doug Carpenter
April 5, 2018

Note: To keep the quiz interesting, we've removed generic identifying words from the names of some streaming services, such as "radio" or "music".

Shares in Spotify were trading Wednesday afternoon down $9.01, or 6 percent, at $140.04.

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

Spotify has around 36 percent of the nascent but growing music streaming market worldwide, according to Statista.

Spotify's other top shareholders are co-founders Daniel Ek and Martin Lorentzon, hedge fund Tiger Global and venture capital firm TCV. That followed several analyst reports that gave the company's stock lukewarm ratings.

Spotify's stock started trading on Tuesday in an unusual public offering - one that lacks many formalities, like a traditional roadshow, that help Wall Street figure out what to expect.

The music streaming service is trading on the New York Stock Exchange under the ticker symbol SPOT.

Spotify generated revenue of €4.09 billion (£3.57 billion) last year, up from €2.95 billion (£2.57 billion) the year prior, for growth of 39 percent.

The direct listing allows Spotify to avoid some of the frustrations that companies have when listing publicly.

In contrast to last year's debut of social media group Snap, Spotify's top executives were not present at the NYSE to see their company go public for the first time. And despite the enormous respect I have for the New York Stock Exchange in this process, I also won't be on the floor doing any interviews'.

Spotify is about to find out whether investors view its music streaming service as a budding superstar or a flash in the pan.

"So while [Tuesday] puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate".

Spotify, like fellow tech firms such as Tesla and Uber, has never turned a profit.

Spotify says it plans to leverage its customer base of 71 million paying subscribers and 157 million monthly active users at the end of 2017 by offering additional services beyond just music in the future.

Amid Spotify's methodical wait to list, MIDiA Research managing director Mark Mulligan called Tuesday "arguably the most anticipated day in the history of digital music". "Our focus isn't on the initial splash".

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