Spotify slides off its debut price after 'novel' direct offering

Getty ImagesDaniel Ek, CEO of Swedish music streaming service Spotify.
  • Spotify went public on Tuesday through a so-called direct listing.
  • The stock began trading at $US165.90 a share shortly after noon, resulting in a valuation of roughly $US30 billion.
  • Shares lost about 10% in their first day of trading on Wall Street.
  • Track Spotify’s stock in real time here.

Shares of Spotify slid as much as 10% in their first day of trading on the New York Stock Exchange Tuesday.

After receiving a reference price of $US132 the day prior to the offering, the stock officially began trading at $US165.90 per share at 12:44 p.m. ET Tuesday, netting the freshly public company a valuation of about $US30 billion.

After initially spiking as high as $US169, shares eventually slid to close at $US149.60, according to Markets Insider data.

In lieu of a traditional initial public offering, Spotify used what’s known as a direct offering – something it described as a “novel method” for going public. It’s the stock-trading equivalent of opening a store and hoping people will just stop in.

The direct listing also meant the company listed without underwriters, a set price, a set supply of shares, or a lock-up on existing investors.

As of January, Spotify had 70 million subscribers, compared with Apple Music’s 36 million. Apple Music, however, was growing at a much faster rate than Spotify: 5% versus 2%.

Check out Business Insider’s full coverage of Spotify’s unusual public offering:

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