Monday, 16 July, 2018

Spotify's market value hovers at around $29B

A banner with the Spotify logo on it is seen as the company lists its stock on the New York Stock Exchange in New York United States A banner with the Spotify logo on it is seen as the company lists its stock on the New York Stock Exchange
Edmund Robinson | 05 April, 2018, 01:33

"The constant is that we believe we are still early in our journey and we have room to learn and grow", commented Daniel Ek, CEO of Spotify.

Spotify has struck a chord with 71 million worldwide subscribers so far and is aiming to increase that number to as many as 96 million subscribers by the end of the year.

Spotify (spot) already has two revenue sources, collecting advertising sales from its free service and subscription revenue from its premium service. However, Apple doesn't rely on paid subscribers to earn a profit for Apple Music, as it has a huge retail family and consumer goods offering - products it can also use to push its streaming service to consumers.

Citing people familiar with Spotify's plans, Recode reports that the idea isn't to cut out massive labels or compete with them by handing out recording deals to musical acts.

Dropbox is now valued at $12.4 billion, while Spotify closed yesterday with a valuation of $26.5 billion.

Spotify's market debut matches the performance of social media company Snap Inc. Spotify's current chief financial officer, Barry McCarthy, held the same job when Netflix went public and remained in that position until leaving the video service in 2010.

Since starting up in Sweden in 2008, Spotify has expanded to 65 countries and has a library of more than 30m songs.




Wall Street's banks still made money on Spotify's offering, however, just not as much as they would have if the company had listed in a traditional IPO.

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

Spotify opened on the New York Stock Exchange at $165.90 a share, giving the Swedish company a value of $29.5 billion. So while tomorrow puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate.

Spotify Technology SA shares surged following the largest-ever direct listing on Tuesday, giving the world's leading streaming music service a market value of almost $30 billion.

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

The unusual listing had added to the suspense over how Spotify would fare on the market as the company, while big on its cool factor, has yet to turn a profit.

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