French music streamer Deezer drops 35 per cent at debut
It’s been a tough debut day for French music streamer Deezer today after shares plunged over 35 per cent on the Paris Euronext.
Opening at 8.50 euros per share via a Spac with France-based SPAC I2PO, the unicorn firm’s stock struggled to rally as markets raised eyebrows at how the French company could compete with Apple Music and Spotify.
Deezer, which was founded in 2007, previously considered floating in 2015, but u-turned due to tough “market conditions”.
However, Deezer CEO Jeronimo Folgueira took the leap of faith and said at the bell-ringing ceremony yesterday morning: “As a proud French tech Unicorn, going public in Paris for us was really important”.
The company had a pre-money equity valuation of around €1.1bn.
All may not be lost. Investment bank Raymond James has previously said that music streaming was in a better position than video streaming, urging investors not to dump streaming shares too quickly.
“So what we see in the competitive environment for streaming music is a lot more stable environment than you see, for instance, in streaming video, where content owners are increasingly taking ownership of their content, walling it off, going directly to consumers”, analyst Andrew Marok said.
This was echoed by analyst Ian Whittaker, who told City PM that the fact that music giants generally don’t need to create their own content like Prime Video or Disney + do means there is less pressure for constant heavy investment.
Whittaker also said that the lack of exclusivity for most music on specific platform means the consumer doesn’t need multiple subscriptions nor has the same incentive to flip between services to watch a must watched programme: Elton John’s hits can coexist on Spotify and Apple Music.