Spotify Valued At $30 Billion Following Debut On New York Stock Exchange

Spotify — Tomorrow

In 2015, Spotify's valuation was priced at just $8 billion - this figure has tripled in 3 years.

Spotify debuted on the New York Stock Exchange through a direct listing on Tuesday and closed its first day of trading at $149.01 per share, above its initial reference point of $132 per share.

Music streaming giant Spotify has had an excellent debut on the New York Stock Exchange (NYSE).

The Swedish Stockholm-based company warned ahead of the listing that prices might be volatile.

However, unlike how most companies issue new shares, Spotify is not - it will be selling shares held by its private investors. Instead, the first public share price was based exclusively on supply from existing shareholders wanting to sell stock, and the demand for it.

No Initial Public Offering means that there are no investment banks to underwrite (or sponsor) and price the offering.

Fidelity said among its customers, baby boomers were slightly more active in trading Spotify shares than Millennials or members of Generation X. Baby boomers made almost one-third more trades than Millennials and 20 percent more trades than members of Generation X. However, the direct listing will be carefully analyzed by other companies that intend to become public, as well as by investment bankers who may lose millions of IPO fees.

Sony Corp. said it has sold 17.2 percent, or 1,748,304, of its 10,164,560 Spotify shares yesterday. 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.

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Spotify shares closed at $149.01 on the end of its first day of trading on the USA stock market yesterday (April 3), valuing the streaming service at $26.5 billion - more than Twitter and Snapchat. Its first day of trading-with relatively few trades-continued the unusual float. Facebook Inc and Alibaba Group Holding Ltd remain the largest tech stock listings in recent years.

Spotify is often credited for reversing a tide of declining revenue in the music industry and a year ago, profits rose to their highest level in a decade, largely thanks to paid subscribers.

Less certain for investors, however, is Spotify's profitability.

That means the $97.30 gain is exclusively to Sony, and was calculated after the company made royalty payments to artists and indie labels.

The direct listing allows Spotify to avoid some of the frustrations that companies have when listing publicly.

Spotify Technology SA made its Wall Street debut in an unconventional way.

In another break with tradition, Ek and Lorentzon did not attend the exchange to ring the opening bell, although the NYSE building was draped in a huge Spotify banner (pictured above).

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