Tiger Global among top Spotify holders with $1.9 billion stake

05 April, 2018, 01:34 | Author: Tracy Craig
  • Spotify — Tomorrow

The business had about $700 million invested in Spotify before it went public through a direct listing, according to a person with knowledge of the matter. But what's even more important to me is that tomorrow does not become the most important day for Spotify.

Whatever happens, CEO Daniel Ek is confident about his company's future. That followed several analyst reports that gave the company's stock lukewarm ratings.

The direct listing by the Stockholm-founded company was the largest on record. However, the company was advised by Goldman Sachs, Morgan Stanley and Allen & Co. prior to the offering.

Sony was permitted to sell Spotify shares yesterday under the SEC's Rule 144a. "Spotify is from the costs of licensing content", said Michael Carvin, chief executive of personal finance technology firm SmartAsset. As a result, the company avoided the fees that banks typically charge for that service and sidestepped a "lockup period" that would have prevented its investors from selling shares immediately after going public. The investment firm hasn't sold any shares, said the person, who asked not to be identified because the information isn't public.

Spotify stock ended its second day of trading at $145.87 down $4.79 or 2.11%.

Analysts had anxious ahead of Spotify's direct listing that forgoing underwriters and traditional promotional events created to stimulate interest from institutional investors could mean volatility once formal trading kicked off. The Swedish company's use of a "direct listing" allows its early investors and employees to sell as many shares as they want whenever they want. By July, though, they were trading at a discount to their IPO price.

French Rail Workers Launch Strike
As well testing Macron's reform mettle, the rolling strike will also challenge the resolve of unions to maintain a common stance. No trains are expected to be operating between France and Italy, Spain and Switzerland, the railway company said.

Share prices dropped as the day went on, ending at $149.01.

And, having looked at those examples, Spotify might legitimately ask how much worse it can do.

Spotify has a great relationship with major music labels, but this will change.

The likes of Uber and AirBnB, too, will be watching closely.

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.

Ironically, this is one instance where an element on Wall Street will be delighted to see a company coming to market and suffering a big drop in its shares.

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