Spotify Shares Drop More than 3% in First Hour of Trading

Listed on the New York Stock Exchange (NYSE) under the ticker symbol SPOT, music streaming giant Spotify’s shares fell more than 3% in midday trading, after soaring as much as 28% from its reference price in the company’s stock market debut today. According to CNBC News, the shares opened at $165.90, but fell to just under $160, which is still way higher than market predictions.

As opposed to traditional IPOs, Spotify conducted a direct listing on the NYSE, which means that no banks underwrote the offering and no price was set ahead of the debut. And even though NYSE had set a reference price of $132 last night based on previous trades on private markets, the final public listing price was ultimately set on the demand of investors.

“Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years,” CEO Daniel Ek wrote in a blog post Monday. “So while [Tuesday] puts us on a bigger stage, it doesn’t change who we are, what we are about, or how we operate.” The company reported nearly $5 billion in revenue for 2017, according to its initial prospectus, though it still posted an operating loss of $461.3 million for the year.

As of December, Spotify had 71 million paying subscribers and over 159 million monthly active listeners, as compared to Apple Music’s 36 million subscribers.