Spotify Stock (SPOT) Drops Below Its 2018 IPO Price — Nearly $17 Billion In Market Cap Wiped Out In 2022 Alone

Spotify Stock (SPOT) ending February 24th, 2022
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Spotify Stock (SPOT) ending February 24th, 2022
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Spotify’s closing price on February 24th, 2022.

Back in 2018, Spotify was the disruptive darling of Wall Street and a pioneer in direct listings. Now, the once-surging Spotify stock (SPOT) has officially crashed back to earth.

Spotify’s once-heady stock has now tumbled below its opening price in 2018, with potentially further downward pressure ahead. In Wednesday (February 23rd) trading, Spotify stock (SPOT) dropped below its symbolic $147.92 valuation, established on the company’s first day of trading on the New York Stock Exchange.

Early Thursday morning, SPOT tumbled to a 2022 nadir of $136.89 amidst heightening concerns surrounding Russia’s invasion of Ukraine. By the closing bell, a late-stage rally pushed SPOT back to $149.21, a scant 1% above its 2018 start.

The drop means that Spotify stock has lost an astounding $16.57 billion in market cap in 2022 alone. Over the past 12 months, that loss expands to $30.2 billion. Since this point last year, SPOT has tanked by nearly 154 points, or 51% of its total share value.

It should be noted that this isn’t the first time that Spotify has dropped below its 2018 direct listing price.

After its ‘non-IPO’ direct listing, shares struggled to regain their footing for years. It wasn’t until mid-2020 that Spotify surged past its initial price tag. By February of 2021, shares had reached a peak of $339.20 as locked-down music fans propelled streaming platforms. Since that point, SPOT has dramatically shed nearly 200 points.

SPOT’s plunge is rooted in a nasty mix of elements happening both inside and outside the streaming giant. On the outside, continued insecurity over rapid inflation and expected rate hikes by the Federal Reserve are rendering Spotify a risky bet. That has now been compounded by growing global instability, with Russia’s advance on Ukraine potentially triggering a range of problems for gas prices, global trade, and broader conflict.

Unfortunately, Spotify is anything but a darling in these treacherous times. Investors first started dumping shares amidst continued profitability problems. Sure, Spotify leads the roost in music streaming, though its underlying financials remain in the red. Spotify CEO Daniel Ek’s ‘go big or go home’ strategy has worked wonders for nearly a decade. But now, markets are growing cautious around heavy-spending, profitless tech companies.

That recently came to a head when Spotify revealed that premium subscriber gains may be plateauing.

Earlier this month, Spotify posted a respectable 8 million premium subscriber gain over the past quarter alone. That raised the total number of paying subscribers to 180 million, a previously unthinkable accomplishment. However, during the current quarter, Spotify is now projecting a gain of just 3 million premium subscribers, part of a financial picture and broader projection that failed to impress Wall Street.

In that soup, it now looks like Joe Rogan is actually the least of Spotify’s problems. A roiling feud involving Neil Young never materialized into a mass exodus of artists, and Spotify stood by its favorite podcaster. Wall Street seems to favor Rogan, as well: just last week, SPOT tanked momentarily after The Joe Rogan Experience became unavailable on the Spotify platform.

Once the glitch was resolved, the stock popped back up.

9 Responses

  1. i love how much you guys hate Spotify

    Here is a reminder of all of the other tech stocks that are all being pummeled in the market right now. Please stop pretending like this is a “Spotify” problem and not a wider tech industry problem.

    Twitter -51%
    Paypal -40%
    Etsy -39%
    Activision Blizzard -37%
    Salesforce -27%
    Adobe – 26%
    Ebay -21%

    Also “mass exodus of artists” is a comical line to use for like 10 artists.

    • Sambo

      Thank you. The sky is not falling, and the market goes in cycles. I bought energy stocks when the Scamdemic hit and before Biden. I knew Biden would shut down Keystone and screw up the market causing oil to go $100 per barrel. The only thing Biden has done good for me is that—I sold a couple of positions at 200% gain. And, in Roth IRA so I never pay a penny in tax.

      I need it now that Biden has gas above $4 per gallon in my area. What a jackwad.

      • Idiot Detector

        Exactly what did Biden do that made gas over $4 a gallon? Speaking of scam…you have no clue. People died from Covid. Oil overproduction from other nations is to blame. Get your head out of the political sandtrap you are stuck in.

        • TruthToPower

          The U.S. oil industry is still producing less crude than it did before the pandemic curtailed travel and cratered demand for fuel. Even as demand returns, oil companies are keeping production flat while using profits to reward shareholders.

          “Oil production is lagging behind as the economy roars back to life after the shutdown,” Energy Secretary Jennifer Granholm said recently during a White House briefing.

          This year, explorers boosted output 4.5% and are expected to keep up the same pace next year. Total U.S. oil production remains 12% below pre-pandemic highs of 13.1 million barrels a day, with no sign of surpassing that in the next couple of years.

          That follows a blistering four-year run that saw U.S. oil producers boost output by more than 50% between 2016 and 2020. Investors are now demanding greater returns so oil companies are forgoing crude expansion and instead returning cash to shareholders while vowing to keep spending in check

      • Angelito

        Replying to your own post with a different name in an attempt to validate your stupidity still doesn’t work. It makes you look even more lame.

  2. Rudi

    Fed Reserve is expected to increase rates not lower rates I believe?

    • Geronimo

      To slow inflation. It doesn’t correct the underlying problems created by this idiot president.

    • Paul Resnikoff

      Yes, you’re correct. Last I checked the market had baked in a 1/2 pt increased, with a small percentage chance of a 3/4 point hike.