Spotify's official debut market value has reached just under $30bn

Greg Lawrence
April 5, 2018

Shares opened at $165.90, up almost 26 per cent from a reference price of $132 a share set by the on the New York Stock Exchange late on Monday. The service already hosts podcasts and radio shows, and it's easy to imagine Spotify will eventually venture into more exclusive content, akin to Taylor Swift's Spotify-only music video for her newest single, "Delicate".

Spotify's shares on the stock market have momentarily begun trading, and according to Music Business Worldwide, individual shares have officially debuted at $166 each, resulting in a total market cap total of $29.6 billion. However, Apple doesn't rely on paid subscribers to earn a profit for Apple Music, as it has a huge retail family and consumer goods offering - products it can also use to push its streaming service to consumers.

However, what makes Spotify's debut unusual that unlike traditional IPOs, the music streaming provider opted out on raising new capital.

Eric Schiffer, CEO of the Patriarch Organization, argues that Spotify's initial stock valuation is far too high and should settle below $100 in the coming weeks.

Spotify's current price on the New York Stock Exchange is bobbing at around $140.3 on the NYSE, suggesting a current valuation in the region of $25bn.

Some experts warned ahead of Spotify's debut that a direct listing opened the streaming giant up to early volatility, without underwriters or early major investors.

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Analysts' advice, however, is that companies are not to be misled by Spotify's first day on the market.

The Swedish company used a direct listing method: instead of issuing new shares, early investors in Spotify were able to sell their existing holdings to cash in on the service's growth over the past decade.

The direct listing by Spotify was the largest on record, with Spotify now having a higher market value than Snap Inc.

"So while [Tuesday] puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate". As I mentioned during our Investor Day, our focus isn't on the initial splash.

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.

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