Spotify's NYSE Debut Is Unique, Does Not Signal Broader Shift

Pell Enlists Fellow New Orleans Natives Tarriona 'Tank' Ball & Neno Calvin For 'Chirpin' (Remix)': Premiere

The Swedish music-streaming company has made headlines over its decision to do a direct listing of its stock, meaning that it did not enlist the help of bankers for the traditional underwriting process.

But that could be bad news for those who invest once the company goes public. Facebook Inc (FB.O) and Alibaba Group Holding Ltd (BABA.N) remain the largest tech stock listings in recent years. "This bodes well for continued brand loyalty, which is a big factor in the stickiness of music services". But it still does not make a profit and faces intense competition from Apple Inc (AAPL.O) and others. Chief Executive Aaron Levie told SiliconANGLE today. Apple Music, however, was growing at a much faster rate than Spotify: 5% versus 2%. Spotify is going public at a time when there is pent-up demand for new tech IPOs.

Swift famously removed all her music from Spotify back in 2014, before returning to the streaming service past year. Alphabet Inc's (GOOGL.O) Google does not release paid subscriber numbers for Google Play Music.

Spotify disclosed in a securities filing for the offering, "There could be greater volatility in the public price of our ordinary shares during the period immediately following the listing".

That represents a premium to smaller rival Pandora Media Inc (P.N), which has an enterprise value-to-sales ratio of one, but is far less than a comparable ratio above 10 for Netflix Inc (NFLX.O) and Dropbox Inc (DBX.O).




The NYSE had set a reference price of $132 for the stock, though the actual price will be determined by shareholders. Estimates for the price of the shares once they hit the public market were between $160 and $220, CNN reported.

Almost 30 million shares had changed hands by the end of regular trading hours. Spotify wanted to democratize the process and they didn't need to raise fresh money through the offering as is often the case with an IPO.

Most of what he discussed on the show were topics and statements he's said multiple times before, including in a public letter he posted on the company's website Monday - particularly looking back at the inspiration that led him to found the company in 2006.

Whoever handles the flags at the NYSE needs to bone up on their vexillology (the study of flags) because the world's biggest music streamer was greeted with the Swiss flag flying on Wall Street on Tuesday morning.

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