Spotify Up 12% On Its Market Debut ($143/share), While The FAANG Lose $400 bn Capitalisation In One Month

Spotify made its debut on Wall Street on TuesdaySpotify made its debut on Wall Street on Tuesday

Spotify made its debut on Wall Street on Tuesday with an initial price of $165,9/share, up 26% from the reference price established ($132/share). The Swedish music streaming firm closed its first trading session up 12% at $143/share.

So that is how Spotify started life on the US market, which has recently taken a beating; the Nasdaq 100 lost 2.9% on Monday, the Dow Jones fell 1.9% and the S&P 500 was down 2.2%. It’s not really been a good time for technology stocks, but on the day of Spotify’s debut the Nasdaq closed up 1.06%.

Spotify’s listing was not a conventional one as there was no IPO.

Like many other ‘unicorn’ companies, Spotify has never posted profits.

In a report submitted to the SEC, the company acknowledged its recent losses and problems

The firm’s market debut was steered by the current financial director, Barry McCarthy, who was  behind the successful listing of Netflix in 2002. Its shares have revalued over 80% in the last year.

It’s worth highlighting that Spotify’s market listing has happened in the same week as the share prices of the big US techs are taking a severe hit, for a variety of reasons. That said, Link Securities flags that the main reason is the high valuations these companies have reached, which mean they have a big weighting in the indices. At the end of the day, the large tech companies were the ones which led the rise in the US indices over most of last year. Facebook saw a revaluation of 53%, Apple 46% and Alphabet (Google) 33% in 2017. The FAANG – Facebook, Amazon, Apple Netflix and Alphabet – have lost nearly $400 billion in capitalisation since the Nasdaq highs of March 12. The question now is whether Spotify will have the same stock market journey.