Streaming music leader Spotify appears to be bracing for a potentially rough stock market ride on its first day of trading, following a steep sell-off of technology stocks on Wall Street.
In a public letter published ahead of its unorthodox listing in New York, chief executive Daniel Ek cautioned employees and fans that “Sometimes we succeed, sometimes we stumble” and “I have no doubt that there will be ups and downs.”
Nonetheless, in informal trading on Monday, pricing for Spotify appeared to be holding up, changing hands at about $132 a share, which would value the company at more than $23 billion.
That also was the reference price identified late Monday by the New York Stock Exchange, which serves as an early estimate of the level at which supply and demand are balanced.
“They are assuming based on where it is trading in the grey market and what it appears right now as supply and demand, around $132 should be a fair price,” an equity trader told Reuters.
Since launching its streaming music service a decade ago, the Stockholm-founded company has overcome heavy initial resistance from big record labels and among some major music artists to transform how the industry makes money.
Spotify offers access to vast libraries of music rather than making users pay for CDs or downloads of individual albums or tracks, with Ed Sheeran and Drake the most played artists.
“Nothing ever happens in a straight line — the past 10 years have certainly taught me that,” Mr Ek wrote in a blog post on Monday evening.
In a test case which will be followed closely by other tech giants the company has structured the stock market listing to allow existing investors to sell directly to the public while offering no shares of its own.