After going public last Tuesday, shares of Spotify Technology SA (NYSE:SPOT) are set to surge in the coming trading sessions as the markets closely watched the company officially launch an initial public offering of its shares.
While the company did not push through with the usual listing method unlike other companies, a number of analysts have projected an upbeat outlook for the IPO of the company.
Instead of going through a traditional route, the company did not issue new shares during its IPO but instead allowed its previous private investors and employees who’ve had the opportunity to buy shares to start selling their shares to the public following the IPO launch.
The process allowed the company to cut costs needed to be paid during IPO launches. Spotify previously stated that this allowed the company to focus more on the building, planning, and imagining for the long term. Spotify chief executive Daniel Ek has also stated before that the new state of the company does not change its previous purpose and operations.
Spotify shares, which were offered at an initial price of $132 per share surged up by 12% at a high of $165.90 per share as the stock traded on the New York Stock Exchange for the first time. The stock opened at $149.01 per share where around 30.5 million shares were traded. The stock closed 10% lower its opening price.
Spotify shares also slid further on Wednesday at around $144.22 per share sending the market value of the company at $26 billion in line with most analyst expectations of around $25 billion.
However, this was lower than the market valuation of other technology IPOS whose market valuations have ranged from $10 billion to as much as $40 billion despite slightly different expectations of the share trading for Spotify.
Despite this, some analysts have stated that the valuation of the stock was attributable to the limited shares made available to the public as Spotify did not issue a new set of shares. Currently, the company is expected to still raise capital from its IPO as the company struggles to return profitability to its shareholders soon.