Revenue is also a key factor in determining share values, and this is an area where Spotify will have a lot to prove. "The last price they had reported as of mid-March was $132.50...[more recently] the stock has been changing hands about $5 higher than that", explained Farrell.
Stockholm-based Spotify can do things differently because it doesn't need to raise money, typically the main reason for doing an IPO.
"Spotify represents the way everyone gets their music out", Mason said and added that while Apple is competing, Spotify is ahead with listeners so far. The world's largest streaming music provider began public trading today on the New York Stock Exchange under the symbol SPOT.
Even though it has been around for years, Spotify is just now becoming a publicly traded company with a multi-billion dollar IPO. According to this report from The Fader, Spotify has actually made losses of over $1 billion over the last three years. It will not have some of the safeguards traditionally provided by investment banks, which try to prevent new stock from following below a certain price.
Banks usually provide stabilization for IPOs, but not in Spotify's case. Before you invest, you should read the prospectus in that registration statement and other documents Spotify has filed with the SEC for more complete information about Spotify and its ordinary shares.
If it goes well, other highly valued tech firms expected to pursue a listing in the future, with the likes of U.S. ride hailing companies Uber and Lyft, could look to adopt a similar approach.
In another unusual twist, the company's founders declined to ring the traditional opening bell on the trading floor on Wall Street.
"We wish Spotify all the best in its next phase as a truly global listed company". While Spotify's cumulative number of paid subscribers is growing, it's not growing as fast as Apple Music's. While I appreciate that this path makes sense for most, Spotify has never been a normal kind of company.
Snapchat owner Snap and meal-kit subscription company Blue Apron Holdings have failed to live up to their IPO valuations once they started trading in public markets. "Our focus isn't on the initial splash", he claims, acknowledging there will be ups and downs, but his focus is on " trying to build, plan, and imagine for the long term".