NEW YORK (CelebrityAccess) — Streaming music giant Spotify ended its first day as a publicly traded company on Tuesday with a valuation that makes Spotify’s debut one of the biggest for a tech company in the history of New York Stock Exchange.
Spotify opened the trading day on a high note, starting trading at $165.90 per share and reaching as high as $169 in early trading, well above the reference price of $132 reported by FactSet. However, by the end of the day, the company’s share price had slid below $150, closing at $149.01 per share, equivalent to a market cap of $26.5bn.
The Sweden-based tech company opted to employ a “direct listing” strategy to go public instead of the more traditional initial public offering model. The direct listing allowed Spotify to let existing shares float publicly on an exchange, without underwriting banks to ensure stability in the process. Spotify said they didn’t want the “the pomp or the circumstance” of a traditional IPO, and in doing so, avoided the lockup period on owned shares that follows such a listing.
Despite the dip by the end of the day, owners of Spotify stock must be pleased with the company’s first day of trading, which ended with share prices over the company’s pre-debut price of $132 set by the NYSE prior to its Tuesday launch.
Some of those stockholders, including record labels who received Spotify equity as part of licensing deals with the streaming music service, now have a better sense just how much that equity is worth.
One such company was Sony Music, which, according to Music Business Worldwide, held a 5.7% stake in Spotify, which was worth $1.51bn at the close of trading on Tuesday. However, it is unclear if the company held its position or took advantage of Spotify’s opening day highs to cash in.
