Spotify’s French competitor Deezer loses ground in stock market debut

The logo of French music streaming platform Deezer is seen ahead of the opening ceremony of the company’s initial public offering (IPO) on the Euronext stock exchange in the business and financial district of La Défense in Courbevoie near Paris, France , July 5, 2022. REUTERS/ Benoît Tessier

PARIS, July 5 (Reuters) – Seven years after an aborted IPO, French music streaming platform Deezer failed to attract much investor interest for its Paris market debut and its shares fell 11% at the start of trading on Tuesday.

Deezer opened at 8.50 euros, before falling to 7.950 euros per share at 07:39 GMT.

Deezer and its rivals represent a shift in the music industry from buying and downloading tracks to listening to remotely stored songs online.

“The industry is super competitive: there are multiple services (Amazon Prime, Apple Music, etc.) that are run by large US companies with very deep pockets and strong ecosystems that can subsidize their business with other sources of income and therefore they are not dependent on the success of their music platforms unlike pure play companies,” said DZ Bank analyst Manuel Mühl.

“In this business, we prefer to invest in content (music labels) rather than platforms that have to pay for that content so they can distribute it and monetize it rather than ads and subscriptions,” he said. -he adds.

In April, Deezer announced plans to list on the Paris stock exchange in a deal valuing the company at just over one billion euros ($1 billion), with a special purpose acquisition (SPAC), 12PO, created for the deal.

In 2015, Deezer had to postpone its IPO plans due to market conditions.

Deezer’s biggest rivals include Spotify (SPOT.N), which completed its IPO in 2018.

($1 = 0.9600 euros)

Reporting by Dominique Vidalon, Additional reporting Clément Martinot; Editing by Sudip Kar-Gupta

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