Daniel Ek Purchases $50 Million Worth of Spotify Stock After Shares Hit Record Low

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Spotify CEO Daniel Ek has officially announced the purchase of $50 million worth of his company’s stock after shares late last month dipped to a record low of $95.22 apiece.

Daniel Ek just recently took to social media to reveal his Spotify stock investment. SPOT rebounded past the $112 mark earlier this week but has since fallen back into the $104 range.

Specifically, the Stockholm-based streaming service was trading for $104.26 per share at the time of this piece’s writing. The figure still represents a small increase from the week’s start, but likewise marks a 56 percent falloff from the beginning of May of 2021, when SPOT was riding (relatively) high at roughly $237.04 per share.

“I’ve always been vocal about my strong belief in Spotify and what we are building,” 39-year-old Daniel Ek wrote on Twitter. “So I am putting that belief into action this week by investing $50M in $SPOT. I believe our best days are ahead…

“While I’m not required to disclose these purchases because of our foreign company status, I thought it was important for shareholders to know,” concluded Ek, whose net worth is $2.1 billion, according to Forbes.

Though Ek’s multimillion-dollar Spotify stock investment failed to elevate shares far beyond their all-time low – the aforementioned per-share price of $104.26 actually marks a slip from yesterday’s close – time will tell whether other factors can bring SPOT back to the record high of nearly $400 per share that it cracked in early 2021.

On this front, Spotify reported 19 percent year-over-year (and four percent quarter-over-quarter) growth for monthly active users (MAUs) in Q1 2022, when a peak of 422 million individuals used the platform. The figure does however encompass an extra three million MAUs owing to an influx of new accounts stemming from an involuntary-logout error. These three million MAUs then signed off before Q1’s conclusion.

Spotify also saw its paid users increase by 15 percent year over year and one percent quarter over quarter, to 182 million – or just beneath the forecasted total. Bearing in mind the figures, Spotify is banking on boasting 428 million MAUs and 187 million paid users at the end of the current quarter, and the somewhat modest totals may be contributing to the current stock-price woes.

To be sure, Wells Fargo analysts cited Spotify’s Q2 2022 guidance when maintaining their “underweight” rating and $153 target price for SPOT; this target has been updated to $101. Truist’s Matthew Thornton, for his part, maintained a “buy” rating for Spotify stock and set an even $150 target, whereas Goldman’s Eric Sheridan went with a “neutral” rating and the same $150 target.

Finally, Citi analyst Jason Bazinet has issued Spotify stock a “buy” rating and a $165 target; for reference, Morgan Stanley less than one month ago slashed its own Spotify stock target from $300 to $225. The latter has now been cut to $170.