Obviously, this is not investment advice, just speculation based on some guesses derived from the chart. Then I suspect that it will decline to approximately $95 around the end of January.Īfter that, we shall see. Perhaps if Spotify had made a tender offer for shares at a fixed price, they could have supported the stock more successfully.īased on the stock’s recent history, it would not be surprising to see SPOT retrace some of its collapse and rise to something in the $120-$130 range by the end of the year. Plus, Spotify announced a $1 billion stock buy back, so the price is rapidly declining in spite of the buyback. SPOT was higher on the market highs and lower on the market lows, so I don’t see the coupling argument at all. I don’t think that is true as SPOT has not moved in relation to the market since inception. Some people think that SPOT is just reacting to the overall market sell-off. Why is that? Possibly because the stock was priced too high to begin with. Starting with the high at the head and shoulders formation, the stock has more or less collapsed on about a 45 degree downward angle ever since. One signal that I found significant was the 50 and 100 day moving averages of the stock price crossed to the downside on October 22, which also happened to be the date that the stock closed below the closing price on the first day of trading. A couple weeks later, more sell signals confirmed the downside move. Once the downside move became apparent, which was about October 10, downward pressure accelerated on rising volume (relatively speaking since volume is low). The low volume of Spotify stock is another one of the untold stories and is another suggestion of price management in the background. Note that at the high, volume was rising. Sure enough, the stock went into a sputtering dive the next day and the dive has continued ever since. This pattern is often associated with a move to the downside, sometimes a sharp move to the downside. You’ll notice that there’s something of a “head and shoulders” pattern emerging when the stock reached its high on Jof $196.28. I don’t put a lot of trust in chart analysis, but some people do and it is one of the few things we have to rely on in this case because there is so much insider activity. If you look at the chart, you’ll see some interesting patterns developing. All of these insiders have an incentive to keep the share price as high as they can before they get their shares sold to the bigger fool…sorry, I mean to other investors. The shares come from insiders at the company and any other shareholder, employee, record company, other investors already holding shares who want to get out. So, you may ask, if the issuer doesn’t sell shares to an underwriting syndicate, where do the shares come from? Spotify priced at $132 using a loophole from the SEC. Facebook priced at $38, Google at $85, Alibaba $68, Amazon was $18. (Dropbox, for example, priced at $21 and closed at $28.48 on its first day of trading. There are no new shares, there is no syndicate, and the price is set ( or was for Spotify) by reference to the price of shares selling in the private market immediately before the public is able to buy–and my bet is that the DPO price was a lot higher than an IPO price would have been. This is completely different from the direct public offering.
#SPOTIFY STOCK PRICE USD FULL#
In the case of a full commitment underwriting IPO, the company sells shares to an underwriting group (or “ syndicate“) and the syndicate then sells those shares to the public after the syndicate decides the valuation of the company and the price of the shares of stock.
These investors are often called “underwriters”. In an IPO, or as its more precisely known, a “f ull commitment underwriting,” the company (or “issuer”) actually raises money through selling new shares of stock to a group of investors, usually banks. Remember, Spotify did not offer shares in an “initial public offering,” they used an untried method called a “direct public offering.” However–Spotify is a particularly interesting stock for a number of reasons, mostly having to do with the nature of the initial offering. Stocks go up, stocks go down, can’t pick a top and can’t pick a bottom.
Guest post by Chris Castle of Music Tech Solutions
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