NEW YORK/SAN FRANCISCO (Reuters) - Spotify Technology SA’s unusual stock market debut on Tuesday levels the playing field for individual investors who are normally at a disadvantage in traditional listings, but could also make them more vulnerable to swings in the music streaming service’s share price.

FILE PHOTO - Headphones are seen in front of a logo of online music streaming service Spotify in this February 18, 2014 illustration picture. REUTERS/Christian Hartmann/File Photo

The Swedish company is skipping a conventional initial public offering and listing shares directly on the New York Stock Exchange (NYSE) with almost none of the safeguards provided by investment banks that would normally manage the process.

Spotify is foregoing the security of having bankers with a financial interest in its success, which will save it millions of dollars in fees to underwriters. The direct listing gives Spotify insiders a chance to sell their shares, but the company will not be selling any new stock to raise money.

In a normal IPO, underwriters promote a company to institutional investors weeks in advance, using roadshows and meetings to gauge appetite for the stock. They use that information to “build a book” and settle on an IPO price, typically the evening before the shares start trading on the exchange.

WHO GETS FIRST DIBS?

Spotify’s plan introduces an extra degree of uncertainty over how initial trading in its stock will unfold. And a slump in shares of Facebook Inc and other technology-related stocks this week means investors may be less willing to bet on the listing.

The direct offering should give retail investors opportunities to buy in at the same price as hedge funds and other big investors who normally get first dibs on IPOs thanks to their relationships with underwriters.

Spotify has warned in filings it expects the popularity of its service to attract outsized interest from individual investors, which could possibly fuel volatility and set an unsustainable trading price.

“There will be people right from the beginning who say, ‘I want to own this at any price,’” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “I think you’ll see a see-saw action. We’ll be looking for the dips.”

In a normal IPO, underwriters act as so-called stabilization agents that can step in and buy shares if trading is weak.

AT WHAT PRICE?

Spotify shares traded between $95 and $127.50 in private transactions in February, according to its filing, giving the company a value of around $20 billion.

RBC analyst Mark Mahoney kicked off analyst coverage of Spotify on Friday with an “outperform” rating and a share price target of $220.

Robinhood, a smartphone stock trading app popular with young people, on Thursday started letting customers place orders to buy Spotify shares, but only through so-called limit orders where the buyer specifies a maximum price.

Robinhood’s clients have searched for Spotify about 14,000 times a day in recent weeks, according to a Robinhood spokesman.

Fidelity’s online brokerage plans to let clients enter orders for Spotify shares starting at 7:00 a.m. EDT on Tuesday, 2-1/2 hours before the stock market opens, a spokesman said.

Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, plans to buy shares of Spotify on Tuesday but is wary of volatility.

“We’ll buy 25 percent of what we want, and then set limit orders for the rest over the next few weeks,” he said.

WHO WILL MANAGE THE OFFERING?

Spotify has hired Citadel Securities as a market maker to set the opening price on the NYSE on Tuesday, with help from Morgan Stanley, but their roles will be limited. Early on Tuesday, they will analyze investors’ buy and sell orders and then set an opening price for the stock.

Citadel will not have the benefit of a price set by underwriters the day before, as would happen in a normal initial stock offer.