With Spotify Stock Surging, CEO Daniel Ek Is Continuing to Cash Out — $57.5 Million Worth of Shares Sold Following Q4 Earnings Release

Spotify CEO Daniel Ek
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Spotify CEO Daniel Ek
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Photo Credit: Magnus Höij / CC by 2.0

With Spotify stock (NYSE: SPOT) hovering around its 52-week high price, CEO Daniel Ek is continuing to cash out, dumping another quarter of a million shares for a cool $57.5 million, according to a regulatory filing.

The 40-year-old Spotify head’s latest SPOT selloff came to light in an SEC filing featuring an approximate sale date of February 7th, or the day after the audio-entertainment platform revealed a relatively solid Q4 2023 performance.

As we reiterated in December, when execs including outgoing CFO Paul Vogel parted with a number of shares, Spotify’s “Insider Trading Policy” requires higher-ups to abstain from selling stock beginning on the 15th day of the fiscal quarter’s final month until market open the day after earnings are disclosed.

Running with that pertinent point, filings show that different Spotify executives yet – longtime HR head Katarina Berg (32,609 shares sold for about $7.74 million), board member Heidi O’Neill (2,325 shares sold for roughly $553,861), and CTO Gustav Söderström (40,000 shares sold for $9.57 million or so) – have likewise joined Daniel Ek in selling shares.

Bringing the focus back to the latter, Ek has according to the appropriate regulatory document sold a comparatively substantial 250,000 shares for $57,505,000 via his D.G.E Investments Limited company. Moreover, the multimillion-dollar transaction has arrived about six months after the Stockholm native moved $100 million worth of Spotify stock.

Of course, these sizable SPOT sales have brought with them questions about Ek’s precise motivation for cashing in. On the one hand, the vocal Apple critic might be becoming bearish on his company or the wider market, which has been surging as of late.

But given Spotify’s aforementioned Q4 2023 earnings – including double-digit subscriber growth – and investors’ responses to the business’s newfound emphasis on profitability, this explanation appears unlikely. (Additionally, 2022 saw a decidedly optimistic Ek predict that Spotify’s annual revenue would crack $100 billion during the coming decade.)

Furthermore, UBS late last month boosted its SPOT rating (buy) and target price ($274), with other target-price bumps from JP Morgan ($220 to $280) and Rosenblatt ($300 to $315) having followed the fourth-quarter performance breakdown’s release.

On the other hand, then, Ek’s parting with millions in Spotify stock could simply be indicative of a desire to diversify his portfolio. Against the backdrop of a rapidly evolving AI landscape – about which the Spotify co-founder has expressed enthusiasm – London’s Air Street Capital last year raised $121 million from backers including Ek, who’s committed to contributing over €1 billion of his personal fortune to European startups by 2030 or so.

That pledge hasn’t stopped the Prima Materia owner from pursuing unrelated plays; Daniel Ek in 2021 unsuccessfully attempted to purchase Arsenal F.C. before dropping €100 million on AI-powered defense company Helsing later that year.

(Bearing in mind the latter, AI-focused Air Street Capital has backed a seemingly separate operation called Lambda Automata, which, according to text on its website, is “building the digital backbone for the age of autonomous warfare.”)

Lastly, Ek’s Neko Health, founded back in 2018, drew $65 million in Series A funding in July of 2023. Per its own website, that AI startup is working towards “creating a proactive healthcare system” revolving around “a new scanning technology for the broad, non-invasive collection of health data.”