Spotify has had a solid debut on Wall Street in one of the most anticipated technology listings in recent times.
A banner with the Spotify logo on it is seen as the company lists its stock on the New York Stock Exchange. Photo: AFP
The Swedish-based music streaming service finished its first day at $US149 a share, valuing the company at $US26.5 billion. It had listed at $US132 and traded as high as $US165.90.
Technology stocks have been big on fanfare in recent years but have had mixed performances after listing, as the share price volatility for Snapchat, Tesla and Twitter have shown, but the Spotify listing was being seen as a test of investors' faith in its future prospects.
Spotify used an unorthodox method to list on the New York Stock Exchange - a direct market listing, which allowed current shareholders to sell their shares directly on the market with no additional shares being sold by the company, which is the more normal listing option, known as an initial public offering.
"[This] puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate," chief executive Daniel Ek said in a blog.
"Our focus isn't on the initial splash.
"Instead, we will be working on trying to build, plan, and imagine for the long term."
The company even chose Scandinavian minimalism for the listing - no executive turned up to fly the company's flag for the debut, and it turned down the tradition of new companies ringing the opening bell at the New York Stock Exchange.
Spotify, like fellow tech firms such as Tesla and Uber, has never turned a profit.
This is despite being the world's largest music-streaming service with 71 million paying subscribers, close to 160 million monthly listeners, and revenue of nearly $US5bn in the past year, as it tries to cover costs, including the royalties it pays to record labels and artists.
The company has about 40 percent of the global music streaming market but is being pressed by the likes of Apple and Amazon, both of which have much deeper pockets.
"The challenge the company now faces is how to monetise non-paying customers more effectively, while paying out royalties to the various record labels for content at the same time," said Michael Hewson of CMC Markets.
