Daily Trends Now
Daily Trends Now


Spotify Founders Enriched to the Tune of $5.8 Billion in Listing

Spotify Founders Enriched to the Tune of $5.8 Billion in Listing

Shares rose as high as $165.90, which would have indicated a $29.5 billion market capitalization, before falling below $150.

Staff at the stock exchange also hung the Swiss flag outside instead of flag for Spotify's native Sweden. The company says it has received $776.7 million of that in cash (before fees), with the other $192.7 million going to insiders selling stock into the IPO. So while tomorrow puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate. The business had about $700 million invested in Spotify before it went public through a direct listing, according to a person with knowledge of the matter. A list of other formidable competitors that includes Google and Amazon also offer similar music streaming services, raising the specter of Spotify being wiped out by far richer rivals. But analysts still aren't sure the company should be worth much more than the $27 billion or so indicated by its current share price.

In comparison, when Snap Inc, the parent company of Snapchat, went public in an IPO past year, it paid almost $100m to its team of underwriters.

In the case of Spotify, it has opted for a so-called "direct listing".




After hitting an intra-day low of $134, which was just above the reference price set on Monday before their debut on the floor, they were rebounding, paring their initial drop to trade -1.41% lower at $139. Its first day of trading-with relatively few trades-continued the unusual float. Spotify now has a higher market value than Snapchat owner Snap Inc, which went public previous year. Despite launching over ten years ago, the streaming service has yet to turn a profit, due largely to high operating costs, particularly the royalties it pays to artists and record labels to play their music. On a comparable basis the Apple Music service has 46 million subscribers.

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.

Normally, companies ring bells.

Spotify has had a solid debut on Wall Street in one of the most anticipated technology listings in recent times.

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