May 19, 2020

Spotify hits $26.5bn valuation in trading debut

Direct Listing
Pouyan Broukhim
2 min
Spotify hits $26.5bn valuation in trading debut

Spotify’s debut on the New York Stock Exchange (NYSE) saw the company’s share price rising as much as 13%, opening at $165.90 per share, later falling to $149.01 – still well above the reference price of $132.

The offering was made as a direct listing, bypassing any underwriting services from banks, with no official price set ahead of its debut. However, the company was advised by Goldman Sachs, Morgan Stanley and Allen & Co. prior to the offering.

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Reaching a valuation of $26.5bn, Spotify exceeded any expectation that anticipated the company to be worth between $20-25bn.

“Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years," CEO Daniel Ek wrote in a blog post Monday. “So while [the listing] puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate.”

As of December, Spotify revealed it had more than 71mn paying subscribers alongside 159mn monthly active listeners, driving its revenue that reached just short of $5bn in 2017. This is significantly ahead of Apple, Spotify’s closest competitor in the music streaming market, who itself has comparably just 36mn subscribers.

The valuation saw Spotify rising above Snap that itself was valued at $24bn following its IPO that raised $3.4bn earlier this year.

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