Spotify Faces The Music
To say October has been a rough month for Spotify is an understatement. Over the last 30 days the streamer’s stock price has lost 23% of its value, and yesterday shares touched an all-time low, closing at $139.11. Part of the decline can be attributed to the Street’s overall sell-off of the tech sector – the market has been jittery over the past few months because of the US-China trade war and rising interest rates, so investors are retreating to safer stocks. This trend has especially impacted Spotify, who continues to bleed red ink while investors guess on the long-term success of the platform.
Now for the intriguing part – after today’s market close Spotify will announce its Q3 earnings. Wall Street is expecting another operating loss, but will the deficit shrink below their $450M net loss in Q2? The other critical metric to look for is their subscriber growth. Investors have continued to bet the farm that Spotify will continue to grow its user base at a rapid pace, which will eventually allow it to turn a profit. So any deceleration in their growth rate could hurt their stock price even more.
Fasten your seat belts for this one!