Spotify soars in $26 billion stock debut

new york — Spotify soared Tuesday to a value of more than $26 billion in its long-awaited stock debut as the market delivered a ringing endorsement of the future of music streaming.

In one of the largest public offerings ever in the tech sector, Spotify on its first day topped the market capitalization of other high-profile recent market entrants, including Twitter, Snapchat parent Snap and Dropbox.

Spotify opened on the New York Stock Exchange at $165.90 a share, giving the Swedish company a value of $29.5 billion.

It closed at $149.01, a drop of more than 10 per cent but still above the pre-trading reference point — and ending the day with a value of $26.5 billion. Trading as SPOT, Spotify took the unorthodox step of listing existing shares directly on the bourse rather than issuing new stock, allowing its founders and early investors to maintain control. 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.

He expected more companies to follow Spotify’s strategy in the future, taking their time to list on the market. “They are getting all the funding they need in the private market and they don’t really need to go public as early,” he said. Spotify has helped change the way much of the world listens to music by popularizing streaming — unlimited, on-demand songs online.

In the United States, the largest music market, revenue from recorded music grew a robust 16.5 per cent in 2017, marking the first time since 1999 at the dawn of online music that the business has expanded for two years in a row.

The growth — in line with global trends — was almost entirely attributable to the rise in streaming subscriptions, according to the Recording Industry Association of America. Thanks to the massive inroads of streaming, Spotify has managed to mollify critics, at least for now.