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Spotify Joins others at stock Market Worth $21Bn.


Spotify joins the stock market, worth $21bn
Spotify has gone public for £21billion in one of the most controversial stock market debuts in history.
The music streaming service, which lets its 157m users listen to a catalogue of 35m songs, sparked a trading storm with its unorthodox float last night.
Musicians including Kiss bassist Gene Simmons and Bush front man Gavin Rossdale say the firm’s arrival has ushered in a new era for music.
But financiers fear its radical approach could upset the balance of power on Wall Street and break the stranglehold of the big investment banks.
Spotify shunned a normal initial public offering where investment banks oversee the issuance of new stock and line up buyers for it, in exchange for massive fees.
The firm instead opted for a rarely-used direct listing where no new shares are created but existing ones are placed onto the open market, allowing investors to buy and sell them freely.
This meant it did not raise any new money on the New York Stock Exchange but existing investors were able to cash out and sell some of their holdings for a profit.
Bankers including Goldman Sachs and Morgan Stanley are expected to pocket around £21million, far lower than normal.
Chief executive Daniel Ek told staff: ‘Normally companies ring bells. Normally companies spend their day doing interviews on the trading floor touting why their stock is a good investment.
‘Spotify has never been a normal kind of company. Instead, we will be working on trying to build, plan, and imagine for the long term.’
With no set offer price, traders were forced to huddle together on the floor of the exchange and thrash out how much they thought the Stockholm-based business is worth before dealing could begin.
It meant that the stock did not start changing hands until 12.45pm in the US – the longest wait on the maiden day of trading since records began.
But following a lengthy haggling process, around a third of the company’s 178.1m shares were eventually released onto the market for $165.90 each.
It is considerably higher than the $132 previously expected, suggesting huge demand for the stock from investors hoping it will emulate the success of tech titans such as Facebook.

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