Share cash streams in
Spotify’s stock market hit
MUSIC streaming giant Spotify made a big noise on its stock market debut – despite losing £1bn last year.
Shares in the Swedish firm surged by a quarter in early trading.
That valued the heavily loss-making company at more than £21billion – bigger than Twitter.
The share sale is set to make Spotify bosses, including co-founder Daniel Ek, 35, a fortune.
Spotify, whose most played artists include singer Justin Bieber, started offering its music service in 2008 and is now available in 65 countries.
It has 71 million paying customers but has yet to make a profit.
Spotify used an unusual route to launch on the stock market by selling existing shares rather than issuing new ones.
The move helped save it a packet by avoiding investment banks. However, it led to uncertainty about demand for the stock.
The shares were originally forecast to sell at around $132 but jumped to $166 in initial trading. However, they later fell sharply to $155. Ek, who appeared on TV show CBS This Morning as his shares went live on the New York Stock Exchange, had earlier warned investors to brace themselves for a share price rollercoaster.
“Sometimes we succeed, sometimes we stumble,” he said. “I have no doubt that there will be ups and downs.”
Yesterday’s surge came despite shares in rival tech firms taking a pasting.
Facebook is still reeling from its data scandal and Amazon has been hit by criticism from US President Donald Trump.
Laith Khalaf, senior analyst, at broker Hargreaves Lansdown, said: “The attraction of the musicstreaming service probably lies in Spotify’s strong market share and rapidly growing revenues.
“It may be some time before Spotify actually turns a profit though, as the company is resolutely prioritising growth over profit, and will be channelling money into investing in services and building further scale.”