Spotify (SPOT) began trading on the NYSE on Tuesday. The stock opened at $165.90, a 38% premium to the $120.50 stock price used in the company's internal valuation in December and a 25% premium to the $132.50 high end of the stock's range in private transactions so far this year. The implied market cap at the open was $32 billion. Over 30 million shares changed hands on Spotify's first day, with the greatest volume at the open.
The company's public debut was a boon to existing shareholders, but new public investors fared less well.Throughout the day, the stock steadily declined, finishing Tuesday at $149.01.
So while Spotify's direct listing may initially be hailed as a success by insiders, public investors did not make money on Tuesday. Market participants should observe the coming weeks' trading in determining the true success of the direct listing.
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