Recent weeks have been eventful for music in the stock market. Founders and investors for Tencent Music saw the newly-floated firm’s share price soar nearly 8% on its first day of trading. But Spotify’s fortunes went in the other direction, indicating it’s going to be something less than a merry Christmas for the company’s investors and owners.
The music streaming brand’s share price fell to an all-time low of $125.55 this week as the firm’s market cap dropped past the $23bn level for the first time.
Sign Of The Times
This stock dive is in line with a broader decline in stocks for US tech companies in recent months. This is being blamed on a number of political and economic factors, including the developing trade war between the US and China. As tensions increase between the Trump administration and their Chinese counterparts, stocks in all sorts of markets have been turbulent, and tech stocks have suffered extensively from the uncertainty and volatility.
These same political and economic factors are likely to be behind Tencent Music making the decision to delay its US IPO, which had originally been scheduled for October. Tencent Music finally started trading on December 12 at $13 a share, having raised around $1.1bn after offering 82,000,000 shares.
This delay would appear to be a shrewd move, as the opening days of trading for Tencent Music have been quite the success story. Of course, it is very early days and there are bound to be more twists and turns on the horizon.
In its first days, Spotify’s share price took a dip before beginning its triumphant rise. Spotify stock hit an all-time high in July of $196.28, with a market cap at $35.3bn. But the law of gravity can’t be denied, and even tech giant Apple has taken some serious blows in the stock market lately.
Spotify’s tumbling share price was widely reported in mid-November, and the fall since its spectacular peak in late July has seen the market cap dive by more than $12bn. These are uncertain times for many organisations, and there will be real concern amongst everyone involved with Spotify unless there is a turnaround soon.