>> Spotify, the world's biggest yet money losing streaming music service bypassed Wall Street, Tuesday, by offering stock directly to investors in an unconventional market debut, the first ever for the New York stock exchange. The gamble appears to have paid off. The stock opened at $165, an opening surge of 25% from its private market value.
Spotify becomes a public company without raising any money. Also unusual? It didn't hire any Wall Street bankers to pitch the stock or step in as the buyer of last resort. And there's no restrictions on insider selling. Which could make for a bumpy ride for the stock. Here's CEO Daniel Elk in an interview on CBS This Morning.
>> While this is obviously a big day, and I'm very proud of my employees. I really just feel like we're in the early days, not celebrating the end days.>> Since launching a decade ago, Spotify has grown to 157 million users worldwide. With 71 million of those paying a monthly fee.
But the company is still losing money as it pays out a hefty amount to music labels and artists. Besides that risk, Wall Street is also concerned about competition from Apple Music, Pandora, and others. Elk, however, thinks Spotify has room to grow and keep the lead as the industry expands.
>> So actually what we've found is when we've got competition, it actually grows the market. Because more people are now talking about streaming. It's easy to forget that just three years ago, even in the US, streaming wasn't really a thing.>> But this stock listing means Spotify's business will be scrutinized under a harsher spotlight, but so will the business of IPOs.
With Spotify's nontraditional stock sale largely viewed as an early success. It could spark potential copycats from other highly coveted tech names that might go public, like Airbnb, Uber and Lyft.