It has drawn criticism from recording artists, who complain that it pays too little. Surviving the transition to mobile, Spotify went public in April 2018, with a market cap of $26.5 billion after the first day of trading. It was an instant success, with a Facebook partnership helping it rise rapidly to prominence. Download NowĮventually convincing record labels to agree to share content in return for an aggregate 20 percent stake, Spotify was launched in 2008. Said Juenger: “A 10 percent/70 percent/20 percent weighted blend of our three cases yields our blended target price of $172, which is 37 percent downside to current market price.The Keyword Optimization Cycle simplifies finding the best keywords by providing a template to effectively structure your research process. He concluded: “Our bull case … still indicates a target price of $285, not much upside to current market.” His base case scenario would get him to a $154 stock price, while his bear case would value the company at $71. “If this is such a big opportunity with important downstream network effects, do we really expect formidable competitors like Apple, Amazon, Google and Tencent will passively sit back and let Spotify capture it, unchallenged?” Juenger asked.
Overall, he increased his forecasts for bear, bull and base case scenarios for the company.īut he highlighted that while “we don’t disagree with the logic of how podcast could improve market share, it’s just a matter of degree.” And Juenger argued: “There are two important impediments we believe the bulls are missing.” One is “geographic limitation” given that “all of these expensive, exclusive podcasts are only relevant in the U.S. The analyst acknowledged though that “we failed to previously appreciate” the logic that, if Spotify succeeds in securing exclusivity on popular podcasts, “it may naturally lead to increased share of paid music streaming, if consumers choose to consolidate their listening into one app.” Added Juenger: “Ardent bulls would argue for additional positive follow-on impacts, believing this will propel Spotify to become increasingly dominant.”
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