Spotify's stock got off the ground with the help of advisers Goldman Sachs Group, Morgan Stanley and Allen & Co and designated market maker Citadel Securities.
Some market-watchers cautioned investors not to read too much into the first day of trading, given the mixed performance of recent tech IPOs and an increasingly competitive music streaming landscape. That followed several analyst reports that gave the company's stock lukewarm ratings.
"The challenge the company now faces is how to monetise non-paying customers more effectively, while paying out royalties to the various record labels for content at the same time", said Michael Hewson of CMC Markets.
After hitting an intra-day low of $134, which was just above the reference price set on Monday before their debut on the floor, they were rebounding, paring their initial drop to trade -1.41% lower at $139. By comparison, internet radio station Pandora Media's market value stands at $1.2 billion almost seven years after that company went public.
Reaching a valuation of $26.5bn, Spotify exceeded any expectation that anticipated the company to be worth between $20-25bn.
The day before the public offering, Spotify CEO Daniel Ek discussed the decision to avoid the usual fundraising and fanfare of an IPO as an example of the company thinking different.
Spotify took an unusual route to going public through the direct listing. Its biggest rivals are Apple Music - which dominates the digital downloads market - Amazon, Google, and smaller streaming services like the French company Deezer and Pandora and Jay Z's Tidal in the US. But on an operating basis, excluding some financial transaction costs, Spotify lost $465 million, 8% worse than the previous year. "The volatility means the VIX is back up above 23 but still some way off the levels seen in February", he said.