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Spotify, trading under the ticker SPOT, made its highly anticipated debut on the New York Stock Exchange on Tuesday. The streaming music power’s first day of trading valued the firm at roughly $26.5 billion, which puts the stock alongside some impressive company.
With that said, let’s take a look at all the details surrounding Spotify’s first few days on the market as well as some other important information investors should know about the company that could be Wall Street’s newest tech darling (also read: 3 Facts Investors Must Know Ahead of Spotify's Unique IPO).
Opening Day
Shares of Spotify didn’t begin trading until 12:43 p.m. on Tuesday. Spotify’s direct listing forced an extended period of market making to land on the best price after the company’s reference price of $132 was set on Monday.
Spotify stock officially opened at $165.90 per share, fluctuating briefly in afternoon trading before closing at $149.01 per share. This closing price valued Spotify at $26.5 billion, which ranked it as the eighth-largest tech IPO after one day of trading, directly behind Google (GOOGL - Free Report) and Snap (SNAP - Free Report) , according to Dealogic.
Second Day
On Wednesday, Spotify opened at $140 per share and climbed as high as $145 per share. The company has seen its stock price dip since then and currently rests at roughly $136.7 per share, as of 2:30 p.m.
Spotify’s stock is currently on track to close the day down around 8% from Wednesday’s opening price.
Business Model/ Competition
Spotify helped pioneer the premium streaming music industry a decade ago. Since then, the company has helped rejuvenate the embattled music industry, which is still dominated by record label giants, Universal Music, Sony Music, and Warner Music.
The company’s premium customers pay monthly subscriptions to stream as much music as they want commercial free. Spotify does offer an ad-supported option, but it currently makes roughly 90% of its money from its premium subscribers.
Spotify currently boasts roughly 71 million paying subscribers around the world, which include users in trial mode. This means Spotify is by far the most dominant player in the market, as its closest competitor, Apple (AAPL - Free Report) Music, last reported 38 subscribers.
Bottom Line
Spotify enjoys a solid relationship with the big record labels and many artists and musicians—who often relish the chance to get discovered by new listeners while gaining a better understanding of their demographics.
However, Spotify currently pays a large portion of its revenues to record labels for the rights to stream music. And its relationships with the music industry will likely become more complicated as Spotify tries to become profitable.
Even more worrisome is the fact that streaming music is Spotify’s entire business. Meanwhile, its biggest competitors, Apple and Amazon (AMZN - Free Report) Music, don’t need to make money from their streaming music ventures as they try to catch up to Spotify.
Spotify also went public—in a relatively unprecedented fashion—at an extremely volatile time for the market and technology stocks in particular.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
How Spotify Stock Has Performed So Far
Spotify, trading under the ticker SPOT, made its highly anticipated debut on the New York Stock Exchange on Tuesday. The streaming music power’s first day of trading valued the firm at roughly $26.5 billion, which puts the stock alongside some impressive company.
With that said, let’s take a look at all the details surrounding Spotify’s first few days on the market as well as some other important information investors should know about the company that could be Wall Street’s newest tech darling (also read: 3 Facts Investors Must Know Ahead of Spotify's Unique IPO).
Opening Day
Shares of Spotify didn’t begin trading until 12:43 p.m. on Tuesday. Spotify’s direct listing forced an extended period of market making to land on the best price after the company’s reference price of $132 was set on Monday.
Spotify stock officially opened at $165.90 per share, fluctuating briefly in afternoon trading before closing at $149.01 per share. This closing price valued Spotify at $26.5 billion, which ranked it as the eighth-largest tech IPO after one day of trading, directly behind Google (GOOGL - Free Report) and Snap (SNAP - Free Report) , according to Dealogic.
Second Day
On Wednesday, Spotify opened at $140 per share and climbed as high as $145 per share. The company has seen its stock price dip since then and currently rests at roughly $136.7 per share, as of 2:30 p.m.
Spotify’s stock is currently on track to close the day down around 8% from Wednesday’s opening price.
Business Model/ Competition
Spotify helped pioneer the premium streaming music industry a decade ago. Since then, the company has helped rejuvenate the embattled music industry, which is still dominated by record label giants, Universal Music, Sony Music, and Warner Music.
The company’s premium customers pay monthly subscriptions to stream as much music as they want commercial free. Spotify does offer an ad-supported option, but it currently makes roughly 90% of its money from its premium subscribers.
Spotify currently boasts roughly 71 million paying subscribers around the world, which include users in trial mode. This means Spotify is by far the most dominant player in the market, as its closest competitor, Apple (AAPL - Free Report) Music, last reported 38 subscribers.
Bottom Line
Spotify enjoys a solid relationship with the big record labels and many artists and musicians—who often relish the chance to get discovered by new listeners while gaining a better understanding of their demographics.
However, Spotify currently pays a large portion of its revenues to record labels for the rights to stream music. And its relationships with the music industry will likely become more complicated as Spotify tries to become profitable.
Even more worrisome is the fact that streaming music is Spotify’s entire business. Meanwhile, its biggest competitors, Apple and Amazon (AMZN - Free Report) Music, don’t need to make money from their streaming music ventures as they try to catch up to Spotify.
Spotify also went public—in a relatively unprecedented fashion—at an extremely volatile time for the market and technology stocks in particular.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>