New York Stock Exchange sets Spotify reference price

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The reference price is not an offering price for shares, mind you. Neither is it the opening price.

At the start of last month we reported Spotify's intention to go public on the New York Stock Exchange.

Well, today's the day - and the NYSE has set a reference price for Spotify Technology of $132 per share.

The reference price will have a part to play in determining the company's eventual pricing. But it is not an offer price, and it is not the opening public price. The price will be determined by Citadel Securities and Morgan Stanley, who are currently analysing investors' buy and sell orders in order to set an opening price for the stock.

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Analysts expect the company to eventually be valued at around $20bn.

There are certainly a lot of impressive numbers surrounding Spotify. It expects its user numbers to rise to over 170m this year - 90m of which will be paying customers. It has an estimated 40% of the global music streaming market, and it has seen revenue increase to a little over $6bn in 2017.

But, of course, this is a company that's never made a profit. Spotify's operating losses for 2017 are expected to be in the region of $330m. And tech companies' performance on the world's stock exchanges is notoriously volatile.

By the end of this week we should have a better idea of Spotify's true worth - and whether or not it constitutes a sound investment.

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Simon Lucas

Simon Lucas is a technology journalist, with a strong emphasis on the audio/video side of consumer electronics and home entertainment, and has been since 2003. He worked for more than 14 years at What Hi-Fi?, the last six of which were spent as the editor of the magazine and website. Since then he's written for Wired, The Guardian, TechRadar, Stuff, GQ and many more besides. 

In the course of his career he's developed a pretty deep understanding of the way both the publishing and the electronics industries function, as well as the sort of intimate knowledge of audio products (both specific and general) that can make people very wary of him at parties.