Spotify Opens at $195.90 Valuing Higher Than Millennial Investors Were Expecting
That's crazy over-valuation. Spotify opened at $195.90 valuing higher than Millennial investors were expecting. Spotify can't compete with Apple and Google in the long run.
Since they own the gateway (App Stores), they pocket 15% on Spotify subscriptions – so either Spotify has to charge more than them, or they operate at break-even, or at a loss. CEO’s and their boys leave nothing for investors now. Dropbox was going to open at $18 then opened at $28. This was supposed to open at $130 and then opened higher. 15% of anyone who uses an iOS or Android Spotify app? I just do not believe Spotify will sustain for the long term;
"Spotify opened on the New York Stock Exchange at $165.90, giving the company a market value of $29.5 billion. The first trade didn’t happen until 12:45 pm Eastern. This is halfway through the trading day and a record for the latest opening time for a public debut. Shortly after the open, shares fell to a little above $160. The digital music company isn’t selling its shares on the stock market, meaning the company isn’t raising any money today. Instead, the event is known as a “direct listing,” is a collection of transactions from existing shareholders (like employees and investors) selling shares directly to stock market investors". According to Tech Crunch.
A streaming music service is NOT worth $30 Billion on its first day of trading once all the block-chain companies start blowing up with the music community. There will not be any need for a 3rd party distribution channel like Spotify. There are a ton of people on computers or other small devices that don't download via an app store. From what I know about Dropbox, I could apply the same logic. Don't know how they determine which users they take 15% from while Apple & Google can afford to operate at a loss for as long as it takes to kill the competition, Spotify cannot. This will not end well for them. Stay away. Stay far away.