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Following its decision to go public via an unconventional direct listing, music streaming service Spotify kicked off trading Tuesday just after 12:30 p.m. ET at $165.90 a share - up 25.6 percent from a "reference price" of $132. And among the streaming households, nearly half subscribe to a music service, a high figure also internationally.

The public markets will essentially only determine what Spotify shares will be worth when they start trading. 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.

Eric Schiffer, CEO of the Patriarch Organization, argues that Spotify's initial stock valuation is far too high and should settle below $100 in the coming weeks.

It's using a "direct listing" on the New York Stock Exchange that will allow the company's early investors and employees to sell as many shares as they want whenever they want.

By the end of the session, Spotify's market valuation was $26.5 billion. And despite the enormous respect I have for the New York Stock Exchange in this process, I also won't be on the floor doing any interviews'.

Amid Spotify's methodical wait to list, MIDiA Research managing director Mark Mulligan called Tuesday "arguably the most anticipated day in the history of digital music". Gabelli & Co analyst John Tinker rated Spotify a "hold", which is often viewed by investors as a negative assessment given how infrequently analysts issue "sell" ratings.

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The company has about 40 percent of the global music streaming market but is being pressed by the likes of Apple and Amazon, both of which have much deeper pockets.

"Normally, companies don't pursue a direct listing".

"Spotify's going to have to get used to market volatility and getting dragged down (or pushed up) by other companies in their general space".

However, he insisted that the initial public offering would not "change who we are, what we are about, or how we operate".

The company said it had 71 million paid users as of December 31 and 156 million active users. Instead, we will be working on trying to build, plan, and imagine for the long term.


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