Industry

Spotify shares drop 8.5% in their second day of trading

Spotify shares drop 8.5% in their second day of trading

For the big labels, the question of whether - and when - to sell their Spotify equity ties in with a potential risk when it comes to dealing with their artists. The position makes Coleman's firm the fourth-largest holder of Spotify, following co-founders Martin Lorentzon and Daniel Ek and Tencent Holdings, filings show.

The performance left Spotify's market value among the 10 highest ever recorded by a technology company following their first day of USA trading, according to Dealogic.

After several hours of anticipation Tuesday morning, Spotify's shares traded as high as $169 in their stock market debut before falling back slightly. The NYSE had set Spotify's reference price late on Monday, giving an early estimate of the level at which supply and demand could be balanced. Sony didn't immediately comment on what pricing it had previously recorded Spotify's stock at on its books. Revenue of $5 billion past year was up 39% from 2016. That places the Swedish company at a valuation of $25 billion, well above Reuters' estimate of $19 billion, and ranks Spotify as the third-largest tech IPO of all time, according to Dealogic.

Their music-streaming services are additive to their user ecosystems, which leaves Spotify essentially alone in the quest to design models to keep its business profitable.

It has more than 159 million monthly active listeners globally, with 71 million of those paying subscribers. Some 91 percent of Spotify's 178 million shares were tradable, a much higher percentage than typical in a traditional IPO.

In a research note sent to clients prior to the company's listing, Laith Khalaf, Senior Analyst at Hargreaves Lansdown, had said: "Spotify has chosen to simply dive straight into the New York Stock Exchange, rather than being lowered in gently by the usual consortium of investment banks". And it feels like the right time to pause and acknowledge the thousands of Spotify employees around the globe who helped build out the Spotify ecosystem while staying true to who we are and what we believe.

The opening public price will be determined by buy and sell orders collected by the NYSE from broker-dealers, the exchange said.

Spotify's successful debut could pave way for other companies looking to go public without the aid of Wall Street underwriters.

Normally, companies ring bells.