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Spotify’s stock price was tumbling long before its Joe Rogan fiasco

Spotify's banner hangs outside the New York Stock Exchange on the day of its IPO in 2018.
Reuters / Lucas Jackson
For what it’s worth, Neil Young isn’t wholly responsible for Spotify’s falling stock price.
  • Samanth Subramanian
By Samanth Subramanian

Looking into the Future of Capitalism

Published

Joe Rogan didn’t help, admittedly. But Spotify’s stock price has been falling from its mid-pandemic peak for months now—even before Neil Young and other artists started pulling their songs from the streaming platform for hosting Rogan’s podcast and its flimsy views on vaccines. It’s an uncomfortable fact that Spotify has to contend with as it prepares to announce its fourth-quarter results today (Feb. 2).

Spotify went public in 2018, and its stock hit an all-time high closing price of $364.59 in February 2021. The first full year of the covid-19 pandemic had been good for Spotify, its shares nearly doubling in that period. Paid subscribers rose sharply, as people stayed at home and listened to Spotify as they cooked, cleaned, or relaxed. Searches for meditation podcasts, and for music that could be tagged “chill” or “instrumental,” increased. Overall podcast consumption more than doubled in that first pandemic year, when it bought the Joe Rogan Experience, the Michelle Obama podcast, and other big brands.

But not long after its stock hit its peak, Spotify correctly worried that covid-19 uncertainties and uneven recoveries from the pandemic would make 2021 a rocky year. The stock price dropped almost consistently through the year, as the growth in monthly active users slowed. Some analysts theorized that Spotify’s decision to hike its subscription prices in 30 markets in April 2021, in a bid to boost revenues, dissuaded new users from signing up; in an earnings call in July, Paul Vogel, Spotify’s CFO, argued instead that technical glitches had been behind the problem.

Spotify’s stock surged briefly again after its third-quarter results, in October 2021, when the company showed strong user growth once more. But then another slow slide, leading to a 52-week low for the share price by the end of January.

On Feb. 2, the company is likely to report a slate of solid results; one forecast showed unique visitors growing by 20% quarter-on-quarter, and analysts thought Spotify would either meet or exceed revenue expectations. But the controversy swirling around the Joe Rogan podcast could dog the stock nonetheless, pushing its price down even in the wake of a fine quarter.

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