The New York Stock Exchange on Monday set the reference price for shares of music streaming service Spotify Technology SA at $132. Its closest competitor, Apple Music, only has 36 million subscribers, reported CNBC.
Founded in 2006 as a free-to-use service funded by advertising, Spotify is now the leading music streaming service. "Normally, companies don't pursue a direct listing", Daniel EK, the founder and CEO of Spotify, wrote in a blog post.
The performance left Spotify's market value among the 10 highest ever recorded by a technology company following their first day of US trading, according to Dealogic.
But on Tuesday, before the market opened, Sony and the Orchard, its independent distribution arm, released a brief statement saying that they were "committed to sharing with their artists and distributed labels any net gain they may realize from a sale of Sony Music's equity stake in Spotify".
After reaching a high of $169, shares closed at $149.01 - 13% higher than its reference price on its first day of trading. That followed several analyst reports that gave the company's stock lukewarm ratings.
With a couple of exceptions, Spotify's investors were free to unload their shares in the almost 12-year-old company. We don't know, for instance, if a certain firm sold or bought shares quietly several years ago.More news: Sir Martin 'rejects allegation unreservedly'
Tiger Global's $11 billion venture capital business, led by Lee Fixel, started its investment in Spotify in 2015 and expanded it into one of the unit's biggest positions, the person said.
"Spotify's going to have to get used to market volatility and getting dragged down (or pushed up) by other companies in their general space".
Spotify has helped change the way much of the world listens to music by popularizing streaming - unlimited, on-demand songs online.
"Today's stock performance is no guarantee of future success, and it's important to remember that Spotify is not yet profitable and faces intense competition from more diversified players like Apple, Google and Amazon, all of which are pushing voice-activated devices that prioritize their own music services", Verna said.
Last month, Spotify announced that it is aiming for 200 million monthly users by the end of this year, with around 96 million paying subscribers.