Spotify:Position Changes
Jump to navigation
Jump to search
Return to: Spotify
2023 April 25
I increased the Spotify position by 1/3 at EUR 122,90 or USD 135.6 minutes after their Q1 2023 Earnings Release. (Previous day close: USD 131.3)
It is now the second largest position after Meta.
Reasons:
- Surprisingly strong MAU growth and strong Q2 Outlook.
- Positive engagement and churn signs.
- Positive Music Industry Outlook.
- Slightly increased operating result and operating margin with clear path to profitability.
After further research and consideration i decided to hold the new shares for the following main reason:
- MAU growth was broad based and both in developed and developing countries with no region standing out and it appears their product is gaining in popularity.
- Spotify is in negotiation with content right holders about a price increase for costumers in 2023 (Probably on the split of revenue). Their data supports their ability to raise prices.
- Note: I like their way of structuring negotiations with right holders which highlights Spotifys importance and power.
- Management sees encouraging signs from testing Spotifys new design and is very optimistic about it longterm.
- AI has potential to further creativity of creators and therefore the amount of content on Spotify. (and Spotifies independence form music labels).
- They have multiple new unannounced revenue streams in the pipeline.
- Operating expensive could be lower w/o special items and there is more cost saving potential.
- Their strategy on advertising is data and ai driven with likely upside potential.
- The more i learn about Spotify the more i am convinced about the quality of their management, culture, way of conducting business and strategy.