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Streaming Service Goes Public

Spotify goes public begins trading at $165.90 per share.

18:22 06 April 2018

Categories : Streaming Music

Spotify shares have started trading, valuing the leading music streaming service at $26.5billion. The company decided not to issue new shares and sold stocks held by its private investors.

Spotify was once a small startup company that has grown rapidly in recent years. Although it is considered the current market leader with over 71million paying subscribers, it is yet to make a profit.

Chief executive Daniel Ek admits: "We are still early in our journey and we have room to learn and grow."

Spotify spends more than what it earns to pay recording companies for the rights to play their music. But the company expects to start making profits in the coming years.

The company went public to fulfill its commitment to investors and give them the chance to cash in their investment. This forced the company to list it shares sooner than later.

Mark Mulligan at MIDia Research said that Spotify has to take drastic actions so it can grow faster.

He explained: "So far they've been treading a very fine line between being the dramatic new future of the music business but simultaneously being the biggest friend of the old music industry by giving record labels a platform to build out of decline," says Mr Mulligan.

"To go to the next phase [Spotify] will have to stop talking out of both sides of its mouth, which it does at the moment. And stop being so friendly to the record companies."

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