France's Spotify rival Deezer loses ground on its stock market debut (updated)

Deezer SA

05/07/2022 09:02

(Adds analyst, updates shares)
    PARIS, July 5 (Reuters) - Seven years after an aborted
flotation, French music streaming platform Deezer  DEEZR.PA 
failed to attract much investor interest for its Paris market
debut and its shares fell 11% in early dealing on Tuesday.
     Deezer opened at 8.50 euros, before heading down to 7.950
euros per share by 0739 GMT.
    Deezer and its rivals represent a shift in the music
industry away from buying and downloading tracks to listening
online to songs stored remotely. 
    "The sector is super competitive: There are multiple
services (Amazon Prime, Apple Music etc.) which are run by large
U.S-companies with very deep pockets and strong ecosystems that
can subsidise their business with other income streams and
therefore they do not depend on the success of their
music-platforms unlike “pure-play” companies do," Manuel Mühl,
DZ Bank analyst said.
     "In this sector we prefer investing into content (the music
labels) vs. platforms that have to pay for that content so that
they may distribute and monetise it over ads and subs," he
added.
    In April, Deezer announced plans for a stock market listing
in Paris in a deal valuing the business at just over 1 billion
euros ($1 billion), with a Special Purpose Acquisition Company
(SPAC), 12PO, set up for the deal.
    In 2015, Deezer had to postpone initial IPO plans due to
market conditions.
    Deezer's larger rivals include Spotify  SPOT.N , which
carried out its initial public offering in 2018.
    
 ($1 = 0.9600 euros)

 (Reporting by Dominique Vidalon, Additional reporting Clement
Martinot; Editing by Sudip Kar-Gupta)
 ((sudip.kargupta@thomsonreuters.com;))