Shares for Tidal soar but investors will face big losses

Shares for the parent company of artist-backed streaming service Tidal, Aspiro, rose 1,032% on the day of its relaunch.

The Scandinavian streaming service, purchased by Jay Z for US$56 million, relaunched yesterday, and launched in Australia for the first time. The launch saw its 17 artist shareowners, including Rihanna, Madonna, Kanye West and Daft Punk, sign a declaration onstage to mark “a whole new era” for subscription streaming.

Shares for Aspiro surged by 1,032% as investors clamoured to buy-in; but it appears they were unaware of the takeover rules between Aspiro and Jay Z's Project Panther Bidco, a subsidiary of his S. Carter Enterprises. The takeover rules state that because Jay Z bought 90% of the company, owners of remaining available shares will have to sell them back to him at the bid price (1.05 crowns each) after Aspiro is delisted from Nasdaq OMX Stockholm (stock exchange) on April 2.

When trading closed, shares were up 938% at 11 crowns each, meaning investors face losses of around 90% when Project Panther Bidco start a compulsory purchase of the remaining shares this month.

"There are reasons to suppose that some have not noticed the communication around the bid," said Nasdaq OMX Stockholm spokesman Martin Hedensio in a statement published by CNBC. “[…] It is our impression that the market has not digested the information, as there are still orders coming on a very, very, very high level.”

The Tidal streaming service has already come to blows with both the artist and fan community. The Haxan Cloak, aka British musician and producer Bobby Krlic, and his label, Tri Angle both accused the service of using Haxan Cloak’s songs without asking.

Haxan tweeted: “This is so shameful. Thanks for not getting in touch and ripping me off, Tidal. https://t.co/SpaZRmv4ud Please retweet!” Haxan Cloak is best known for is producing credits on parts of Björk’s Vulnicura.

Tri Angle’s tweet has since been deleted but can be viewed over at Pitchfork. The tweet reads: Respect to Tidal for licensing some @haxan_cloak music and for not asking someone to unceremoniously rip him off https://t.co/HEK9Vn5ULe.

Music fans have tweeted their distain at Tidal’s pricing tier with SMH publishing the tweet: "Multi-millionaires doing an awareness campaign for their favourite charity: their bank account #TIDALforALL". In Australia users have been offered the hi fidelity lossless platform for $23.99 a month, more than double the monthly price for a premium subscription to market leaders Rdio and Spotify. 

Madonna, a shareowner of Tidal, has come to its defence, posting on Instagram: "Tidal is not about consumption and greed! Its about protecting an art-form that is beloved to all of us MUSIC

"If you refer to Tidal as Illuminati, you are paying us the highest of compliments. As I've stated before it is another name for "The Enlightened Ones" a group of scientists, philosophers and artists that emerged after the dark ages. They changed and shaped the world for the better! Do the research and find out for yourself!"

Tidal is available in Australia, US, Canada, the UK, Ireland, Germany, Poland Finland, the Netherlands, Belgium, Luxembourg, Italy, South Africa, Czech Republic, Slovakia, Singapore, Denmark, Spain, Portugal, Estonia, Latvia, Lithuania, Norway, France, Austria, Switzerland, Hungary, Turkey, Sweden, Slovenia, Greece, Romania, Cyprus, Malta and Hong Kong.