Spotify Could Get a Little Wild When It Goes Public

It looks like Spotify AB really is going to go public by doing a direct listing on a U.S. stock exchange, and I am starting to get excited. The idea of a direct listing is that, instead of doing an underwritten initial public offering in which sellers (Spotify and its founders and early investors) decide how much they want to sell, sign up some banks, build a book of demand, and then all at the same time sell their stock to investors chosen by the underwriters, Spotify will just one day declare that it is public and that anyone who wants to buy or sell can, on the stock exchange, like any other stock.

In practice I assume this means that Spotify will go public by means of an opening auction on the New York Stock Exchange or Nasdaq: Early one morning, some Spotify shareholders will make indicative offers to sell their shares, and some bold investors will make indicative bids to buy them, and the exchange will publish some tentative price that seems like it will clear the supply and demand, and then other shareholders and buyers can come in and adjust the prices and quantities that they want, and eventually a clearing price will be reached, and the stock will open and trade normally. It's what happens in every other stock every morning, except that every other stock had a closing price the day before, and Spotify won't. So that opening auction will be a bit wild.