“Spotify officially opened at $165.90 this afternoon in its wildly anticipated public debut,” Evan Niu writes for The Motley Fool.
“The NYSE had set a ‘reference price’ of $132 in the morning, serving as a sort of guideline for investors that were lining up to place orders,” Niu writes. “Since there were no investment banks crunching valuation numbers or setting a price, the reference price is really just a recommended starting point that is based in part on recent trading activity in the private market. Spotify shares had traded as high as $131.88 in the first half of March.”
“At that opening price, which was driven by strong investor demand for Spotify shares, the Swedish company is valued at $29.5 billion,” Niu writes. “That puts trailing-12-month revenue in the ballpark of 4.3 billion euros ($5.3 billion), meaning that shares opened at a valuation of about 5.6 times sales. That valuation prices in optimistic expectations for Spotify’s future, even as Spotify has long been unprofitable thanks to hefty royalty costs paid to record labels.”
Read more in the full article here.
MacDailyNews Take: It’ll be interesting to see how that price holds up, or doesn’t, over time.
You’d have to be stupid to subscribe to Spotify when it has 33% fewer tracks than Apple Music for the same price. Apple Music boasts a catalog of 45 million songs; Spotify has a mere subset of just 30 million. Don’t be stupid. If you’re still subscribing to Spotify, it’s past time for you to cancel it and upgrade to Apple Music. (See also: How to move your Spotify playlists to Apple Music.) – MacDailyNews, February 6, 2017
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Spotify is a poor man’s Apple Music. The demographics in this race, as ever, greatly favor Apple in the long run. — MacDailyNews, January 3, 2018
SEE ALSO:
Spotify files for direct listing of up to $1 billion; claims 71 million paying subscribers; lost $1.5 billion last year – February 28, 2018
Apple Music poised to knock off Spotify – February 12, 2018
Apple Music was always going to win – February 6, 2018
Apple Music on track to overtake Spotify, become No. 1 streaming service in U.S. this summer – February 4, 2018
Apple Music and Spotify now account for the majority of music consumption in the UK – January 3, 2018
Spotify files for its IPO – January 3, 2018
Spotify hit with $1.6 billion lawsuit from music publisher – January 2, 2018
Watch out Spotify and Apple Music, here comes Amazon – December 18, 2017
Spotify leads call for investigation into ‘troubling’ Apple and Google app store practices – May 5, 2017
Apple Music passes Pandora and Spotify in mobile usage – March 29, 2017
Spotify hits 50 million paid subscribers – March 3, 2017
Apple Music surpasses 20 million paid members 17 months after launch – December 6, 2016
Oh ok, Spotify listeners are upgrading to Apple Music – July 19, 2015
Spotify CEO claims to be ‘ok’ with Apple Music – June 9, 2015
Another overvalued company that doesn’t make a profit… I’m sensing a theme. What the living fuck is wrong with the markets? These people are insane, strong fundamentals and minimal debt don’t matter anymore, but fantastical projections and losing 50-100 milouin a quarter is a good thing? What the fuck.
This is all about the Spotify executives, early investors, and investment bankers having an exit strategy and making big $$$.
Probably just like with TV there will probably be the demographic that only wants free local TV channels with rabbit ears and tons of commercials….and then the rest of us that pay for what we want to watch without all the garbage ads. We’ll see. Personally life is too short to spend it watching or listening to commercials. I’d rather pay the $15/month but thats just me.
I don’t think any investment banks were involved, that’s why there’s no offering price, but a reference price. There are no new shares being sold or money being raised.
Utter madness
“You’d have to be stupid to subscribe to Spotify when it has 33% fewer tracks than Apple Music for the same price.” This argument sounds a lot like the earlier “look how many more applications are available on Windows than Mac”. As long as enough popular songs are available, it’ll satisfy most people. I think the only reason Apple hasn’t killed off Spotify is Apple’s user experience… how people find old favourites, discover new songs, and easily organize and share playlists isn’t sufficiently better than Spotify. Certainly not like Mac OS vs Windows. And Spotify’s auto-recommendation feature seems better. I’m always hopeful that Apple will invest in better software, but this seems less important under Cook.
You can fool some of the people…