Sweden's Spotify welcomed to stock exchange with Swiss flag

Spotify hits the right note

Spotify (SPOT) opened at $165.90 a share on the New York Stock Exchange Tuesday bringing the companies value to $30 billion.

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 company's launch comes at a hard time for the U.S. tech sector, as a series of political scandals surrounding companies including Facebook and Amazon has seen share prices tumble in recent weeks.

Spotify stock ended its second day of trading at $145.87 down $4.79 or 2.11%.

Some market-watchers cautioned investors not to read too much into the first day of trading, given the mixed performance of recent tech IPOs and an increasingly competitive music streaming landscape.

"They are getting all the funding they need in the private market and they don't really need to go public as early", he said.

The venture capital unit of New York-based Tiger Global owns 12.8 million shares, or 7.2% of the company, according to a March 20 filing. Trading under the symbol SPOT, the Swedish company's losses grew to 1.235 billion euros ($1.507 billion) previous year, its largest ever. However, it faces competition from Amazon and Apple and is reliant on the four big music companies which control rights to 87% of the music streamed on Spotify.

The direct listing allows Spotify to avoid some of the frustrations that companies have when listing publicly. Analysts are anxious that will be more hard for Spotify to do because it is primarily negotiating for the same music streaming rights as Apple, Google and Amazon - companies that can afford to pay even more, if they want. It offered no further details of the transaction, but if it was made at Spotify's closing price of $149.01, the sale would be worth $260.5 million.

Spotify said in a regulatory filing that it had 159 million monthly users including 71 million paying subscribers - twice that of closest rival Apple Music. The listing on the NYSE didn't change the financial plans of Spotify's shareholders. Should that happen, Spotify will be able to command better terms from these artists and labels than it gets from, say, Universal Music.



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