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Deezer Shares Fall 29% on First Day of Public Trading

The French music streamer is the fourth music-related company to go public by merging with a special purpose acquisition corporation.

Deezer had a rocky first day as a publicly traded company on Tuesday (July 5) as its share price fell as much as 35.1% and finished the day down 29.4% to 6.00 euros.

Taking advantage of broad investor interest in music and the soaring music streaming market, the 14-year-old French music streaming company listed on the Euronext Paris exchange with the DEEZR ticket after merger with I2PO, a special purpose acquisition corporation that raised 275 million euros ($282 million) in a 2021 initial public offering. It shelved its first attempt at going public in 2015 after market conditions deteriorated. The timing is better to go public in 2022, however. SPACs have given companies an additional route to stock markets and the global music market has rebounded after a 15-year contraction.

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Deezer is the seventh music-related company to go public since 2021 — along with Universal Music Group, French company Believe, Abu Dhabi-based music streamer Anghami, Chinese music streamer Cloud Village, U.S. label and publisher Reservoir Media and ticketing company Vivid Seats. Three of those companies — Anghami, Vivid Seats and Reservoir Media — also went public with a SPAC merger. A fifth music-related SPAC merger is expected by U.S. wholesale distributor Alliance Entertainment this fall.

But Deezer enters the public market at a challenging time for stocks in general. The Euronext 100 index, which declined 2.6% on Tuesday, has fallen 17.5% year to date. That’s in line with the declines in the S&P 500 index and New York Stock Exchange. The Nasdaq’s 27.6% year-to-date decline better reflects the market’s dour sentiment on tech stocks. Streaming stocks have been especially susceptible to investor doubt in 2022 following subscriber losses at Netflix and lower-than-expected gains by Spotify, which has fallen 55.2% year to date through Tuesday.

With 2021 revenues of 400 million euros ($431 million) and market capitalization of 678 million euros ($696 million), Deezer is far behind market-leading Spotify, which generated revenue of $10.9 billion in 2021 and has a market capitalization of $20 billion. Deezer has 9.6 million subscribers compared to Spotify’s 182 million at the end of March. Earlier this year, MIDiA Research put Deezer’s share of the global music subscription market at 2%.