Yesterday seemed to be a good listing experience for Spotify. One would expect some price volatility when it is initially listed. I am sure there will be more of this ahead. The “price discovery” period can be painful with any new listing, just like any IPO.
The stocks sold were from existing owners, so the most of the gain went right to their pocket without the middleman (investment banking) taking their cut. If I were an existing seller, I would be “happy as a clam” with that. While you still always have to pay your Uncle Sam on the gain, you can at least cut out some significant costs.
It will be interesting to see where this goes. There is still a big amount of the stock that is closely held, so there is not a lot of float. Wall Street has no incentive to support the trading of the stock. I actually would think they would bet against it. Finally, just like many IPO’s, they have yet to have earnings. Sales are growing, but turning those revenues into profits can be challenging.
It will be interesting, but, just like IPO’s, I prefer to sit on the sidelines and watch. New public listings always have a very short track record in their financials to make reasonable decisions about their future.
I prefer not to be on the “bleeding edge”. Sometimes it is just nice to be a spectator!
