Share of Spotify rival Deezer dips in commercial debut
PARIS — Shares of French music streaming service Deezer fell on their first day of trading, a further sign of the difficult environment facing start-ups and loss-making companies.
The Parisian competitor of music streaming services including Spotify Technology SA SPOT,
saw its shares fall by more than a quarter on Tuesday, the company’s first day on the Paris Stock Exchange. The plunge, down more than 30% at one point, came after the company reached a SPAC deal in April, valuing it at around $1.1 billion.
Deezer’s pessimistic start is a sign that there are limits to investors’ appetite for music streaming services, even as these offerings have become a major source of revenue for the music industry. In addition to Spotify, Deezer faces competition from similar services from Apple Music and Amazon.com Inc., which benefit from their larger scale and alternative revenue streams.
Shares of technology companies have traded lower this year. Rising inflation and fears of a recession have put particularly strong pressure on startups, some of which have suffered discounts in recent fundraisings.
A person close to Deezer said the company expected volatility in the early days of trading and its outlook was strong.
An expanded version of this story appears on WSJ.com.
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