Spotify's shares open at $165.90 valuing the music streamer at $29 billion

Spotify's shares open at $165.90 valuing the music streamer at $29 billion
The world's largest music streamer, Spotify, just went public with the first trade priced at $165.90. That is a 25.7% jump from the reference price of $132 placed on the stock by the NYSE last night. The full name of the company is Spotify Technology SA, and shares trade on the Big Board under the ticker symbol SPOT. At the opening price, Spotify has a valuation of $29 billion, 45% higher than the $20 billion valuation placed on the firm this past February.

This is an unusual IPO since Spotify has not hired any underwriters to help bring the company public. Under a plan being tested out by the NYSE, Spotify's current stockholders are selling all of the shares in the offering. As a result, the music streamer will not receive any of the money from shares being sold today. However, it does give Spotify a currency it can use for acquisitions, and also allows the company to raise money by selling additional shares in the future.

At last count, Spotify has 70 million paying members globally, well above the 38 million paying subscribers that belong to number two Apple Music. Unlike Apple, Spotify does offer a free ad-supported tier of service that has more than 70 million users.

One important note, investors should know that Spotify has yet to turn a profit since launching on October 7th, 2008. Then again, it took Amazon approximately seven years as a public company before turning its first annual profit, and some of those who bought shares in Amazon during its IPO became millionaires.

source: Reuters

FEATURED VIDEO

6 Comments

1. TechSceptic

Posts: 1156; Member since: Feb 05, 2018

It's not surprising that Spotify is evaluated well, as they definitely is the best music streaming option available, and they have been for quite some years now. I've tried all of the other options apart from Tidal, and i always return to Spotify.

2. kiko007

Posts: 7500; Member since: Feb 17, 2016

This valuation has little to nothing to do with the quality of Spotify. If anything, it had more to do with potential growth opportunities Spotify is afforded.

4. TechSceptic

Posts: 1156; Member since: Feb 05, 2018

It would not be valuated highly if it offered a horrible service and had a history of poor choices and inconsistent leadership. Spotify has remained a leader of music streaming for quite a few years now, and they're going to continue to do so, if their current development is any indication, as i can't remember a single time where Spotify messed up and ruined the high quality experience that we have as users.

6. CreeDiddy

Posts: 2240; Member since: Nov 04, 2011

Good for Spotify! I can only think of Spotify being relevant for less than 3 years. I believe Apple Music will plummet their stock. The problem with Spotify is that they are only a one trick pony. Apple has deeper investments and followers. We are talking potentially 1+ Billion iOS subscribers that can tap into vs. Spotify's less than 160+ million including free and paying subscribers, but only 75+ million paid (subscribers). Spotify is counting on ad revenue along with paid subscribing revenue to survive the long haul.

11. Martin_Cooper

Posts: 1774; Member since: Jul 30, 2013

Almost no android user will touch an apple app let alone apple music. Spotify has over a billion of potential customers waiting just on the Android platform. If anything Apple is going to hit a roof in the next few years, Spotify has no roof, its not an android company, its not an apple company, its open to everyone and is not a biased company that will always prefer one platform to the other, like apple music.

9. johnbftl

Posts: 283; Member since: Jun 09, 2012

Maybe they can start paying me more than 3/5 of a cent per steam now. It's absurd how little artists get from them. As much as I hate Apple as a company, I love that they pay out at over 70% to the artist.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.