Spotify's opening act on Wall Street struck a chord with investors betting the unprofitable company's trend-setting music streaming service will maintain its early lead over Apple and other powerful challengers. After several hours of anticipation Tuesday morning, Spotify's shares traded as high as $169 in their stock market debut before falling back slightly. The stock closed at $149.01—well above its previous high of $132.50 in deals worked out during Spotify's 12-year history as a privately held company, the AP reports. The stock market's warm welcome left Spotify with a market value of about $27 billion, according to FactSet. By comparison, internet radio station Pandora Media's market value stands at $1.2 billion nearly seven years after that company went public. More on the streaming service's big day, including why its debut was "unconventional":
- NBC News has a helpful explainer on how Spotify approached its debut. Instead of going the popular route of initial public offering, Spotify opted for a direct listing, meaning no new shares were added to the existing shares already held by private investors and employees. Going this "unconventional" route is basically "a chance for existing shareholders to sell their shares to the public through the exchange," an expert tells NBC. NBC has more on the process and why Spotify chose to go that direction.
- Tuesday's 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. Spotify CEO Daniel Ek, who founded the company, emerged as the day's biggest winner. His 27% stake in the Swedish company, which boasts 70 million paying subscribers, is now worth $7.4 billion.
- The day was a "success" but also offers "a tepid forecast for the future of music streaming." The Verge explains why, looking specifically at the stock's slide from the opening high, as well as Spotify's lack of profitability.
- The company may not report a profit until next decade—but the New York Times looks at why investors flocked to it regardless. It all has to do with the company's relationship with record companies.
- NPR, meanwhile, talks to experts and looks at why Spotify may never be profitable.
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