Deciding to go public on Tuesday, 3 of April, 2018, via a floatation on the New York Stock Exchange market means that the company value could potentially be between $20 billion and $25 billion (N7.2trillion and N9 trillion) according to analytics.
Spotify opened at $165 and fell slightly after the morning bell. Meanwhile, a looming trade war with China has seen shares across Wall Street plummet. Wall Street is also given a chance to hype up their newest asset and the company's CEO can be expected to take interviews and spend the day on the trading floor discussing their product. Unlike other companies who handle this process with the involvement of investment bankers, Spotify is not issuing any new stock. "It opens the door to any unicorn out there that focuses on the consumer", Nicholas Colas, cofounder of DataTrek Research, said.
Spotify selected market maker Citadel Securities for a role in setting an opening price based on buy and sell orders.
Spotify's debut is the second recent test of investors' appetite for tech IPOs.
The company, with more than 71 million subscribers, is not raising any money through the IPO.
One of the first people to spot the mistake was Sven Carlsson, a Swedish tech reporter who covers Spotify for Di Digital.
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Apple said subscriptions have maintained a monthly growth rate of 5 percent and they have 36 million subscribers in the United States. Spotify lost about $1.5 billion in 2017, more than double its loss from the prior year. But until then let's step back and admire this whole thing for the zeitgeist-ian work of art that it really is; Spotify is about to unleash the first authentically Millennial IPO. By going public through a direct listing, Spotify will avoid the hefty fees that are typically earmarked for banks.
Spotify's IPO has been unconventional by most industry standards. "Normally, companies don't pursue a direct listing", Ek wrote in a public post.
"You don't want to underestimate how important it is to insiders to be able to sell right away", Kennedy said.
Such listings, sometimes called a "direct public offering", cut out traditional underwriters that would line up investors, drum up interest for the stock and help support the initial stock price. Instead, current shareholders were able to sell their existing shares, and were not restricted on when they could do so.
But a direct listing comes with risks. Spotify will be straight listed on the NYSE without additional shares or fundraising. The stock market has also been volatile recently with the Dow Jones industrial average falling more than 450 points, or almost 2 percent, Monday. While I appreciate that this path makes sense for most, Spotify has never been a normal kind of company. It is also not known at what price the stock will start trading Tuesday.
Analysts had anxious ahead of Spotify's direct listing that forgoing hiring investment banks as underwriters or holding traditional promotional events with institutional investors could mean volatility once formal trading kicked off.