Martin Lorentzon
According to a new report from Swedish music site, Di Digital, Spotify founder Martin Lorentzon has sold nearly $41 million in shares.
The Swedish source says that SEC documents reveal that the sale happened back in July, shortly after the company’s massively successful public offering. The deal was worth about 370 million Swedish kronor, which translates into roughly $40.8 million at current exchange rates, with a slightly higher conversion in July.
Separately, Digital Music News hasn’t been able to find the SEC filings in question, though we’d expect divestitures of this nature to be made public under U.S. regulatory rules.
This massive sell-off is believed to be the first time that Lorentzon has sold his shares since cofounding Spotify back in 2008. Martin Lorentzon is considered to be the largest provider of Spotify’s initial capital funding and holds the most shares out of all co-founders.
His holdings are estimated to be worth around $3.8 billion at the stock’s current price. In that context, this cash-out seems like small potatoes.
Spotify’s offering earlier this year was a hugely successful one, with shares starting at $132 in April. Lorentzon’s holding company Rosello reportedly handled the deal, trading 222,300 shares at a price of $180.40 on July 11th. Lorentzon made a tidy profit from the stock’s initial price, but it has gone nowhere but up since the offering.
SPOT is trading at $191.47 at the current time of writing, up from the monthly low of $175.50 on August 3rd.
Spotify is now facing fierce competition in the music streaming industry, with Amazon stepping up its focus.
Amazon’s straetgy is to offer streaming music through its smart speakers, and bolster that differentiation in partnerships with famous artists like Yo-Yo Ma. Just this week, Amazon kicked off an over-the-top ad campaign featuring mega-stars like Ariana Grande and Kendrick Lamar.
Spotify isn’t standing still, however. The company is now providing original content through podcasts, striking merchandise deals, and even launching live events based on famous Spotify playlists. Just recently, the company inked a partnership with Samsung, one that will position Spotify as the default music streaming device on future smartphones.
Meanwhile, Spotify is struggling against Apple Music in North America. Just recently, Spotify became the second-largest streaming music service behind Apple Music in the United States, in terms of paying subscribers. According to DMN sources, Apple Music first stretched ahead of Spotify in July, and Apple CEO Tim Cook subsequently declared dominance in the U.S., Canada, and Japan.
Spotify has offered no response to those numbers, and has declined to break down its US-based numbers.
I love how you call it a “massive sell-off” followed by “small potatoes.” Stellar blogging going on here! 😛