However, the music streaming service is also facing questions over profitability and increasing competition from rivals, particularly from Apple Music, the music streaming service offered by consumer electronics giant Apple. "This is a large listing, and Spotify has the advantage of a huge consumer base which it can leverage into retail investors". The share price closed at $149.01, still above the reference price.
"Spotify's strong market debut shows that investors regard it as a healthy and promising business, and it's easy to see why", eMarketer analyst Paul Verna told FOX Business. If this works, many companies may use Spotify's IPO as a benchmark.
Spotify is hovering around $29 billion in market value on its first day of trading as the streaming music service hopes to gain ground in a growing industry.
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A $10,000 investment in Netflix's 2002 initial public stock offering would now be worth more than $2.6 million, leaving some investors wondering if Spotify might be on a similar trajectory in music streaming.
The direct listing by Spotify was the largest on record, with Spotify now having a higher market value than Snap Inc.
Spotify enters its first full day of stock market trading valued at almost 27 billion dollars. Among these streaming households, 43 per cent subscribe to a music service.ie, 26 per cent of all Swedish households subscribe to at least one music streaming service.
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Newly public companies have the benefit of their Wall Street bank underwriters doing all they can to make the stock market debut a success. Although it's growth may seem healthy, experts have warned that "price volatility" is expected due to Spotify's unusual "direct listing" approach to flotation.
Normally, companies ring bells. "Spotify has never been a normal kind of company".
Spotify has filed a registration statement (including a prospectus) with the Securities and Exchange Commission ("SEC") relating to its ordinary shares.
All You Need To Know About Spotify Going Public
Spotify has also made it clear that it intends to remain focused on adding more subscribers instead of making money for now. The NYSE had set a reference price of $132 for the stock, though the actual price will be determined by shareholders.
Last month, Spotify announced that it is aiming for 200 million monthly users by the end of this year, with around 96 million paying subscribers.