The music-streaming company joined the ranks of New Economy share market debuts that have minted new HNW individuals.

Spotify’s stock market debut has made its founders two of the wealthiest people in Sweden, adding to a trend that has seen IPOs create more largesse for beneficial owners in recent months, as figures show.

The $21 billion equity market arrival for the music-streaming platform means chief executive Daniel Ek is worth $2.4 billion because of his 9 per cent economic stake in the business (source: Bloomberg). His co-founder Martin Lorentzon’s 12 per cent stake in the business will amass him a fortune of $3.4 billion. Trading in Spotify Technology, to give its full name, started yesterday. The New York Stock Exchange on Monday set the reference price for shares at $132.

The arrival of Spotify on the equity market involved an unusual route. The firm used a direct listing where no new shares were created but existing ones were put onto the open market so that investors can buy and sell them without restriction. No new money was raised on the NYSE but existing investors could cash out and sell some stakes for a profit.

In recent years, IPOs of e-commerce and social media giants such as Asia’s Alibaba, and US-based Facebook, have created multi-billionaires of founders Jack Ma and Mark Zuckerberg, respectively, as well as a cohort of other high net worth and ultra-HNW persons. In Facebook’s case, the IPO, held in May 2012, got off to a rocky start, beset by some trading issues, with prices falling from the opening $38 price, but has since rallied, although recent controversy over use of clients’ data has rattled the business. As many as 970 new millionaires were expected to be created from the Facebook float, a report at the time said.

Across the globe, data from EY recently showed that proceeds from IPOs in Europe and the US grew in Q1 from a year earlier although Asia saw a decline. The EY report showed that global IPO markets raised $42.8 billion in Q1, up 28 .per cent from a year ago, although the volume of offerings, at 287, fell 27 per cent, showing that average values created by IPOs rose.

Share floats, along with trade sales, the exercise of share options and other developments are key liquidity events tracked by wealth managers in seeking potential new clients. This publication also works with Wealthmonitor, a data and analysis firm, in examining trends in this space. 

One result of Spotify’s share debut is that bankers including Morgan Stanley and Goldman Sachs are expected to earn less than they would from a more conventional IPO float, reports said.