19 before falling as low as $249.00 on March 30 - a 35.7% tumble in just 39 days.When Spotify Technology SA prices exhibit either an increasing or decreasing trend over time, simple exponential smoothing forecasts tend to lag behind observations. Spotify’s share price began 2021 at $317.42 and rose to $387.44 on Feb. It rolls out one original podcast series after another, most notably Renegades: Born in the USA with Bruce Springsteen and Barrack Obama, which premiered Feb. Spotify’s exclusive licensing with The Joe Rogan Experience, its top podcast in numerous markets, started in December. Investors have been excited by news of podcast acquisitions and deals for exclusive and original content with the hopes spoken-word audio would improve their margins that stem mostly from music companies’ royalties demands. White, calling MAU concerns “nothing more than noise,” maintained his price target at $380. Even so, Anmuth dropped his price target from $385 to $330 because of “mixed results” in a note to investors on Wednesday. JP Morgan’s Doug Anmuth is still upbeat about Spotify, especially about opportunities to engage listeners with new services such as Locker Room. Nevertheless, ARPU is a highly visible and closely followed metric. Spotify Launches Podcast Subscription PlansĪRPU is a messy metric for gauging a subscription service’s performance - Spotify would point out that family plans have lower churn rates, which directly impact a subscriber’s value. Average revenue per user (ARPU) fell 1% to 4.12 euros ($5.00) per month and has consistently fallen because more subscribers buy family plans, which allow up to six people on one account, and expansion into new markets with lower prices. MAU growth in Latin America and Southeast Asia has slowed after they were “strong outperformers,” CEO Daniel Ek said in Wednesday’s earnings call. Of course, many factors could be behind the price drop. In simple terms, the revenue loss from a 5 million decrease in free listeners is worth just €20.8 million for all of 2021, or 0.2% of annual revenue, according to Billboard’s estimate. How big was investors’ reaction? Compared to the plummet in market capitalization, the financial impact is a drop in the ocean. “We have found the market often takes issue with a particular data point during a Spotify earnings call and the stock subsequently plummets,” he said.
White wrote in a note to investors on Wednesday that he believes Spotify’s fundamentals remain strong and Wednesday’s sell-off is a good buying opportunity. Spotify's Daniel Ek Says He Has Secured Funds, Plans to Submit Offer to Buy ArsenalĬhopping $7.2 billion from Spotify’s market capitalization is an overreaction, according to Brian White at Monness Crespi Hardt.
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