Spotify with unconventional “direct listing” tomorrow

Spotify shares - the music streaming service begin trading tomorrow on the New York Stock Exchange. The company chose an unconventional  way - "direct listing", bypassing the traditional Wall Street process - the initial public offering, and creating considerable uncertainty about the start of trade. The difference from the IPO process is that the shares can be sold on Day 1 of the trading.

Spotify does not sell any new shares and there will be no IPO price as the starting point for its debut. Instead, NYSE floor makers and Spotify's financial advisors, led by Morgan Stanley, will work together to compare buyers and sellers to determine the starting price. This, according to many acquaintances, may take hours. A price range will appear, which will gradually narrow to the opening level. Those familiar with the issue say the shares are unlikely to be available for trading before noon (US time).

There are positive moods for the company, despite recent cuts in technology giant stocks.

MKM Partners, for example, initiates a $ 200-per-share cover for the share while RBC sets a $ 220 price.

“There is a lot of appetite here,” said Sean Stiefel, a portfolio manager at Navy Capital. “So far at least they have emerged as the go-to smartphone music service ahead of Pandora, YouTube and Amazon.” Given their unconventional listing plan, he added “but it kind of depends on how this thing opens”. Spotify itself has warned that trading could be volatile.

Source: Financial Times

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