Investors in Spotify Technology SA could be in for a turbulent Tuesday as the company uses an unorthodox maneuver to go public on the New York Stock Exchange, without many of the protections built into a standard initial public offering.
The music-streaming company has warned the process, called a direct listing, could result in greater volatility on the first day of trading than in a typical IPO. In part, that is because there isn’t any bank to act as a “stabilizing agent” and prop up the stock if it plunges. On the other...