Deezer: the French music streaming giant misses its IPO (for now)

News hardware Deezer: the French music streaming giant misses its IPO (for now)

It was a small event for the French company specializing in music streaming: Deezer went public a few days ago. But the title has not (yet?) convinced investors, and has greatly lost its value during its first week of trading.

The first steps of the French Deezer on the stock market

It is this Tuesday, July 5 that Deezerthe French streaming giant, signed its Initial Public Offering. The CEO of Deezer, Jeronimo Folgueira, and the Minister of Economy himself, Bruno the Mayorwere present at the premises of Euronext, to ring the bell marking the start of trading.

During this symbolic ceremony, the Minister welcomed this “Symbolic date for Deezer, which will be able to grow (and) have access to international markets, particularly Anglo-Saxon ones. ». Next to Jean-Noel Barrotthe brand new digital minister in France, Bruno Le Maire, recalled the challenges of this IPO:

“There is an economic issue, in terms of jobs, wealth creation, cultural too. I believe in French cultural sovereignty and streaming platforms, it’s a way to defend French culture, French song. »

A half-hearted introduction

This time is the right one? In 2015, Deezer had already tried to go public, but the French company had to give up, in an insufficiently favorable context, where all the conditions were not met to crown this operation with success. Jeronimo Folgueira considers that they are this time:

“The situation is different from what it was in 2015, (in a market for) music streaming really established. The state the company is in today is much better than it was seven years ago. (It’s) the right time (to) become a listed company. »

However, not everything went as planned. On its first day of trading, the Deezer stock, launched at €8.50, lost 16% of its value around 9:35 a.m. By 11 a.m. it had collapsed 35%. During the week that followed, the stock endured a continuous decline.

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Big ambitions for 2025

But the fall of Deezer is to be placed in a broader context. Quoted in Le PointPierre Michaud, portfolio manager at Monocle, talks about the case of Spotify, whose stock market value has lost 60% since the start of 2022. The American Nasdaq index, a benchmark in the digital sector, is down around 30%. According to Pierre Michaud, “Deezer comes at a time when capitalizations are rationalizing. » This discount is therefore not necessarily alarming.

Moreover, the Deezer company has set itself great ambitions: by 2025, it intends to double its turnover. Unlike Spotify, which wants to diversify through podcasts and audio books, Deezer intends to bet everything on music, its core business, and on alliances with several strategic partnerssuch as the telephone operator Orange in France.

“Our intention is to find partners with whom we can enter new markets, because we have an extremely competitive product and, with the right distribution, we know that we can conquer market share and compete with the big players. — Jeronimo Folgueira, CEO of Deezer

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