"The attraction of the music-streaming service probably lies in Spotify's strong market share and rapidly growing revenues", Khalaf said.
Shares in the music streaming service Spotify climbed in the minutes after it began trading through a direct listing on the stock market, with the company trading up 22 per cent at $161.44 shortly before 1pm in NY.
The public listing came after more than three hours of discussion among traders who struggled to set a price of the company: according to reports, it's the latest open for a NYSE-listed stock ever, beating out retail giant Alibaba which began trading just before noon in 2014. Unlike other companies who handle this process with the involvement of investment bankers, Spotify is not issuing any new stock. Seeking to take the company to the next level, the Swedish-based company signaled its intention to go public this past February. "Even though Spotify's scale is about twice that of Apple Music, Apple has a huge ecosystem of products to market to".
Spotify declined to comment for this story citing the SEC mandated "quiet period", which restricts companies from making certain public statements during the going public process.
Unlike a traditional IPO where employees don't sell shares for months, known as a "lock-up", Spotify insiders are already allowed to sell.
Spotify had 4.09 billion Euros in revenue last year (or close to $5 billion), compared to 2.95 billion Euros (about $3.6 billion) the year before.
Spotify has positioned itself as a key contributor to the reversal of the music industry's decline, by convincing millions of people to pay for an on-demand music subscription service. Spotify wanted to democratize the process and they didn't need to raise fresh money through the offering as is often the case with an IPO.
Spotify made its debut on Wall Street Tuesday via what many are calling an unusual "direct listing". Under his watch, Stockholm, Sweden-based Spotify has weathered its share of controversies, including tussles with powerhouse artists like Taylor Swift over how much they are paid for their work. While I appreciate that this path makes sense for most, Spotify has never been a normal kind of company.
Smooth early trading dispelled market worries that Spotify's New York Stock Exchange debut might be marred by volatility, given the company's choice to ditch Wall Street underwriters and other safeguards of a traditional initial public offering.
The NYSE had set a reference price of $132 for the stock, though the actual price will be determined by shareholders. The stock fell below that price in its first minutes of trading, hitting as low as $162 a share.