Spotify share price drops on first day of trading

Spotify share price drops on first day of trading

Spotify share price drops on first day of trading

Kiss bassist Gene Simmons said musicians aren't getting paid what they deserve by streaming platforms, but that's not entirely Spotify's fault. "It's not manipulated or set by any puts and takes by banks or institutional investors", Chi-Hua Chien, an early investor in Spotify who is now at San Mateo, California-based venture capital firm Goodwater Capital, told Reuters. Some 91 percent of Spotify's 178 million shares were tradable, a much higher percentage than typical in a traditional IPO.

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. Sony didn't immediately comment on what pricing it had previously recorded Spotify's stock at on its books.

'Like many tech companies Spotify comes with an exciting growth story and a few hazard signs too. Almost 91 per cent of Spotify's 178 million shares were tradable, a much higher percentage than typical in a traditional IPO.

A $10,000 investment in Netflix's 2002 initial public stock offering would now be worth more than $2.6 million, leaving some investors wondering if Spotify might be on a similar trajectory in music streaming. But on an operating basis, excluding some financial transaction costs, Spotify lost $465 million, 8% worse than the previous year. 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.

Spotify's IPO made for an exciting day on Wall Street.

"Normally, companies don't pursue a direct listing".

It has around 80m more users than its nearest rival, Apple Music, and 25m more paying customers, but posted a loss of €1.23bn a year ago on revenues of €4bn. "While I appreciate that this path makes sense for most, Spotify has never been a normal kind of company". But though Millennials are also a key demographic for Spotify, the Swedish company's listing did not draw disproportionate interest from that generation.

At the end of previous year, Spotify counted 159 million monthly users of which 71 million are premium subscribers.

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