Spotify Tempts Bulls Ahead of Debut at a Mystery Trading Price
(Bloomberg) -- It’s anyone’s guess what price Spotify Technology SA’s shares will trade at when they debut Tuesday, but that hasn’t stopped analysts from jumping in with buy recommendations.
Four analysts released bullish research on the music-streaming company last week ahead of an unusual direct listing on April 3.
Atlantic Equities LLP analyst James Cordwell and RBC Capital Markets analyst Mark Mahaney both suggested buying Spotify for its leading role in a global market. But the bulls still disagreed on a price - their targets are 38 percent apart from each other.
The average price target among analysts, according to data compiled by Bloomberg, sits at approximately $193, implying a 45 percent premium to where shares had traded in private transactions, company filings show. Spotify indicated that the low and high sales price ranged from $48.93 to $132.50 in the period from January 1, 2018 through March 14, 2018. The Wall Street Journal Sunday wrote that private transactions prices last week reached a high of $137.50, citing people familiar with the information.
Without a traditional initial public offering, Spotify shares have no indicative price range. Instead, the trading price will remain a mystery until existing holders sell shares on the New York Stock Exchange. “With no shares being offered, supply seems to be the greater unknown,” MKM Partners LLC’s Rob Sanderson said in his buy-rated initiation note. “We are anticipating unusual trading dynamics in the days and weeks following the April 3 listing and are unsure how long before adequate liquidity will be established.”
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