Spotify’s direct listing (and comparison to Netflix); ECB sells bond after spotting an error after 2 years; Nomura to hire fewest graduates in five years as it spends more on robots

Spotify’s direct listing

As reported earlier, Spotify listed directly on the NYSE today at an opening price of $165.90, the stock ended the first day of trading in New York at $149.01, up from the reference price of $132 set yesterday by the NYSE.

Spotify has offered a streaming service since 2008 and has 159 million monthly active users including 71 million paid subscribers globally. It generated €4 billion (about $5billion) in revenues last year, up over 40% from 2016, and a €1.2 billion ($1.5 billion) net loss compared with about €542 million ($664 million) in 2016. The company’s average revenue per user has declined from €6.84 in 2015 to €5.32 in 2017 as it promotes its “Family Plan” which allows several users to share one account. Analyst reckon that Apple Music will overtake Spotify in terms of paid subscribers in under 2 years, yet the company is now valued at $28 billion (5.6 times revenues).

Some are comparing it to Netflix which is valued at $131 billion (11.2 times revenues of $11.7 billion) with 110 million paid (and 117 million total) subscribers. Netflix trades at a price to earnings ratio of 240. Apparently, Spotify investor Lakestar thinks the company should be worth $100 billion and won’t be selling its shares (for now).

ECB sells bond after spotting an error after 2 years

The ECB (via Bundesbank) sold a bond issued by Telefonica Deutschland two years after it bought it. The bond which was due to mature in November 2018 breached an ECB rule that they should not hold bonds that pay a step-up coupon (one that could go up in value if certain conditions are met – in this case if the company was acquired).

This was the third time they found an error in 2018 and sold a corporate bond. How many more errors will they find?

Nomura hiring fewest graduates in 5 years in Japan as it increases investment in robots and AI

Nomura, Japan’s largest brokerage plans to hire just 530 graduates this year as it steps up its investment in robotics and artificial intelligence. Nomura is an interesting case (which we are going to write about sometime), it had cutting edge technology and was worth $50 billion by the end of 1980s. At one point of time it was the most valuable company in the world by a big margin. Today, the company is worth just $20 billion.

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