Spotify soared 26 percent from its reference price in the company's stock market debut Tuesday, opening at $165.90 a share.
The music streaming service is trading on the New York Stock Exchange under the ticker symbol "SPOT." Unlike a traditional IPO, Spotify conducted a direct listing, meaning no banks underwrote the offering and no price was set ahead of the debut.
The NYSE set a reference price of $132 Monday night based on previous trades on private markets, but ultimately the publicly-listed price was based on investor demand.
Shares were mostly stable at the open price in the first few minutes of trading.
"Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years," CEO Daniel Ek wrote in a blog post Monday. "So while [Tuesday] puts us on a bigger stage, it doesn't change who we are, what we are about, or how we operate."
The company reported nearly $5 billion in revenue for 2017, according to its initial prospectus, though still posted an operating loss of $461.3 million for the year.
Spotify had 71 million paying subscribers and more than 159 million monthly active listeners as of December 2017, positioning the service far ahead of its closest competitor, Apple Music, with just 36 million subscribers.
Goldman Sachs, Morgan Stanley and Allen & Company advised Spotify on the offering.
—CNBC's Michelle Castillo contributed to this report.
