French music-streaming service went public via a SPAC deal, but has yet to strike a profit
PARIS — Shares in French music-streaming service Deezer fell in their first day of trading, a fresh sign of the difficult environment facing startups and loss-making companies.
The Paris-based competitor to music-streaming services including Spotify Technology SA SPOT, +7.50% saw its shares fall by more than a quarter on Tuesday, the company’s first day on Paris’s stock exchange. The tumble, down more than 30% at one point, came after the company struck a SPAC deal in April valuing it at roughly $1.1 billion.
Deezer’s downbeat debut is a sign that there are limits to the investor appetite for music-streaming services, even as such offerings have grown to become a major source of revenue for the music industry. In addition to Spotify, Deezer faces competition from Apple Music’s and Amazon.com Inc.’s similar services, which benefit from their larger scale and alternative sources of revenue.
Shares in technology companies have been trading down this year. Rising inflation and fears of a recession have put particularly heavy pressure on startups—some of which have taken haircuts in recent fundraising.
A person close to Deezer said that the company expected volatility in the first days of trading and that its prospects are strong.