The streaming giant's stock closed its first day at $149.01 per share.
As previously reported, the Swedish company employed an unusual direct listing method, allowing 91% of its 178 million shares into the market for public trading. Spotify is the largest company ever to employ a direct listing. The NYSE set an initial stock price at $132 per share, roughly mirroring the price set on the private market. It would rocket up to a high of $165.90 before settling at $149.01 amidst speculation about the company's business model. The closing price places the value of the company at $26.5 billion.
"Investors are right to have some reservations," Michael Carvin, chief executive of personal finance technology firm SmartAsset, told Reuters. "Even though Spotify's scale is about twice that of Apple Music, Apple has a huge ecosystem of products to market to."
Spotify is the largest player in a streaming market that's grown increasingly important to the music industry. This allowed it to renegotiate its deals with labels last year, bringing its gross margins (revenue minus expenses) up to 21%. However, the company has also never turned a profit and competitors like Amazon and Apple are far more diverse in their offerings.
CEO Daniel Ek posted a letter to Spotify's website prior to first-day trading. He said the company's mission is "to unlock the potential of human creativity—by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it," before signing off by quoting Daft Punk: "Harder, better, faster, stronger." Thus far, Spotify has drawn enduring criticism from artists for its low royalty payouts.
While the first day of trading went relatively smoothly for Spotify, the stock exchange welcomed its direct listing with a Spotify banner but mistakenly hung the Swiss, rather than the Swedish, flag.