The Spotify is successfully launched on stock exchange. The Swedish company’s share was traded in New York at a value of 165.90 dollars (135.20 euros) to start selling. As a result, market value of Spotify was estimated at 29.5 billion dollars – this was around a quarter more than was estimated before stock market was launched. As a result, shares were significantly more valuable than before in private transactions.
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Over past 12 months, Spotify shares have been traded privately between 48.93 and 132 dollars. For IPO, company chose unusual method of so-called direct placement. No new shares are sold, but only already existing shares are traded. Spotify saved costs of usual procedure for banks as intermediaries. However, with direct placement, company also refrained from collecting fresh money and took an uncertain trade start. For New York Stock Exchange, it was first direct placement ever.
Spotify has its own information about more than 71 million paying subscribers and a total of 159 million users. The company was market leader among Musikstreamingdiensten in 2017 with a share of 40 percent among paying subscribers, but has been writing only red numbers since its inception in 2006. Although sales increased by almost 39 per cent in 2017, operating loss of 349 million to 378 million was at same time. In 2018, Spotify wants to reach brand of 200 million users, but expects a minus of 230 to 330 million dollars.
Company chief Daniel Ek said that IPO “does not change who we are, what we are and how we proceed”. Before market debut, Spotify compared with video streaming leader Netflix. The company had previously committed to Barry McCarthy, who had already put Netflix on stock Exchange in 2002, as chief financial officer. Netflix also made long losses, but today is profitable and worth more than 123 billion dollars on stock market.
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According to market estimates, 60 percent of all music sales are now from Streamingdiensten. While Techgiganten Apple, Amazon and Google can afford ir competing Streamingdiensten to offset losses from or lines of business, Spotify has no or revenue sources than subscription fees and advertising. For se, however, royalties must be paid to right owners of music offered.
