Application-based music service providing corporation, Spotify is going public. On Monday, the New York Stock Exchange already fixed the reference price for shares of music streaming service Spotify Technology SA at $132.
Spotify is looking for a different direct listing to reach the public markets in place of an initial public offering. According to Reuters, the trading will take place on Tuesday.
The reference price is neither an offering price for the shares nor is it the opening public price for shares of the Swedish technology company.
NYSE will collect the buy and sell orders. Then, it will determine the opening price. Based on those orders, the opening price will be set based on a designated market maker’s determination of where buy orders can be matched with sell orders at a single price. But the reference price will play a part in Spotify’s eventual pricing.
Though Spotify has not hired traditional underwriters – a move that will save it millions of dollars in fees – it has hired Citadel Securities as a market maker to set the opening price on the NYSE, with help from Morgan Stanley. While their roles will be limited, the reference price will be used while building the order book. Early on Tuesday, Citadel and Morgan Stanley will analyze investors’ buy and sell orders and then set an opening price for the stock.