Shares in Spotify fell back on the first day of trading on the US stock market after the music streaming firm’s highly anticipated launch.

The shares opened at $165.90 (£118) – more than a quarter higher than the $132 guide price set by the New York Stock Exchange on Monday. After going as high as $169, they lost ground to close at $149.01.

That makes the Swedish company worth about $26bn – well above the value of other tech firms such as Twitter.

Spotify used an unconventional process to go public: instead of issuing new shares, early investors sold their existing holdings. That move gave the firm’s early backers a chance to cash in on its growth.

Traders huddled on the floor of the New York Stock Exchange on Tuesday morning, gauging interest from buyers and sellers to determine the opening price.

By the end of the day, about 30 million shares had traded hands. Despite their retreat the shares remain well above the prices Spotify said they fetched in recent private transactions.

Spotify’s first-day valuation ranks among the 10 largest for a technology company’s debut, behind firms including Facebook and Alibaba.

Spotify, which started offering its music service in 2008 as an upstart music platform, is now available in 65 countries.

It has added millions of users to its free-to-use ad-funded service in recent years, converting many of them to its more lucrative subscription service.

It is now the global leader with about 71 million paying customers, almost twice as many as Apple Music, but is still yet to make a profit. Spotify posted a loss of €1.23bn last year despite making revenues of €4bn.

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