Spotify Seeks To Stoke Wall Street Enthusiasm On Its Equity

Spotify Technology SA, an audio streaming service, will have its first investor day since becoming public in 2018, in the hopes of rekindling Wall Street's enthusiasm despite the deteriorating global economy, Dawn Chmielewski and Supantha Mukherjee reported for Reuters.

Photo Insert: So far in 2022, the company's stock has dropped 53%, worse than the 24% drop in the S&P 500 communication services sector index, which includes Spotify and other media and social network companies.

So far in 2022, the company's stock has dropped 53%, worse than the 24% drop in the S&P 500 communication services sector index, which includes Spotify and other media and social network companies.

Nonetheless, Spotify has fared better than some other streaming services, such as Netflix, whose stock has dropped 67 percent this year as it loses subscribers for the first time in more than a decade.

Despite suspending its service in Russia and dealing with a backlash over Joe Rogan's podcasts, Spotify continued to add users and paying subscribers in the first quarter. The service reported 422 million monthly users in the first quarter, exceeding the consensus estimate.

Advertising revenue increased by 31% year on year to 282 million euros ($302 million), although this fell short of Wall Street expectations.

Jefferies analyst Andrew Uerkwitz expressed concern about fallout from Russia's attack on Ukraine, which Spotify said would result in the loss of about 5 million listeners in Russia.

The impact, he wrote, might go beyond subscriber disruptions. "It's clear the geopolitical factors are impacting willingness to spend on advertising (not just SPOT)," Uerkwitz wrote in an investor note.

Another media analyst, Michael Nathanson, warned about the long-term growth of digital advertising amid growing prices, an impending recession, the end of pandemic-fueled digital ad expenditure, and the Ukraine crisis, while highlighting Snapchat parent Snap Inc.'s latest guidance.

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