Spotify sold $1.25 billion worth of stocks in 2024, records 145% stock growth

Music streaming giant, Spotify has sold about $1.25 billion worth of stock in 2024. In a report made by the Financial Times based on SEC filings, the company’s executives and board members championed the activity to strengthen its financial force and capital base. 

Spotify co-founders, Daniel Ek and Martin Lorentzon were reportedly responsible in the run for the bulk of the insider sales. This made the company accumulate about $900 million attributed to their transactions. 

Earlier in November, Lorentzon offloaded $383 million worth of stock in a single transaction, adding to Ek’s substantial sales earlier in the year.

Ek, Spotify’s Chief Executive Officer, cashed in nearly $350 million worth of shares, including $28 million in a single December transaction. According to Bloomberg, Ek’s net worth is now over $7 billion. Also, Lorentzon, who remains on the company’s board, sold more than $550 million in stock during the year, cementing his place among the world’s wealthiest corporate leaders.

Other top executives such as Chief Product Officer Gustav Söderström and Chief Business Officer Alex Norström also capitalized on the company’s stock rise with share sales worth $106 million and $63 million respectively.

The transaction milestone comes when Spotify is experiencing notable growth as its stock surged nearly 145 per cent this year. It has from that point reached a closing price of $461.64 per share on its last trading day, representing a huge change compared to its December 2022 value.

Likewise, Spotify’s stock selloff collides with its continued push for profitability and strategic shifts which include its aim for advertising, non-audio entertainment, and most especially artificial intelligence.

Though its share price recently cooled slightly from its record high of $506 to $461.64, investors are still confident of a potential future increase as the company seeks various initiatives for business strategies.

Spotify’s stock resurgence emanates from a renewed focus on profitability. After experiencing layoffs in 2023 and price increases across dozens of countries, the company has reported profits every quarter in 2024. Most of its sales were concentrated in November and December which further highlights the financial benefits flowing to Spotify’s leadership amid a tripling of its share price.

Spotify’s recent turnaround has placed the streaming giant in the same category as Netflix in terms of streaming dominance. Both companies have gained ground in cementing their positions to emerge as leaders in their respective markets and the streaming wars.

Related Post: Spotify Wrapped 2024: Asake is the most-streamed artist in Sub-Saharan Africa (SSA).

Spotify’s dark clouds

Amidst the surge in stock price and value accumulations, Spotify challenges persist in the broader music streaming industry.

Its slow subscription growth at major labels like Universal Music Group has raised concerns about the future of streaming revenue. However, key industry players have been troubleshooting including revising royalty models, reducing family plan discounts, and introducing higher-priced subscription tiers to counter declining growth.

On another end, Amazon Music – another major player in the industry and Spotify’s closest rival – announced an expanded partnership with Universal Music Group this week. The development has been described as an “artist-centric” initiative aimed at driving growth in the streaming sector. 

It also highlights the shifting dynamics and revolving growth trends within the industry as platforms and labels seek new strategies to sustain revenue and adapt to evolving consumer behaviour and market competition.

Spotify’s response will be anticipated next year which will also describe how the company plans to navigate the industry challenges after achieving a major feat during the last months of 2024.

Speaking of challenges, the National Information Technology Development Agency (NITDA) in November raised an alarm that cyber threat actors are using Spotify to promote harmful activities. The agency warned Nigerians about a cyberattack in connection to the popular music streaming platform. 

NITDA pointed out that these unidentified individuals exploit the platform to advertise game hacks and spam links, thereby exposing users to all forms of cyber threats. They also promote pirated software (commonly referred to as ‘cracks’) and other malicious sites.

According to the agency’s statement, cybercriminals use spiteful promotions in playlist names and podcast descriptions on the platform. It added that these promotions are used to advertise game hacks for popular video games such as Fortnite, GTA, Apex, and Roblox. 

NITDA advised users to be careful of unverified playlists and podcasts, avoid clicking on unknown links, and also update their Spotify app to the latest version to minimize vulnerabilities. It explained that websites depicting OpenAI’s popular AI, ChatGPT, are mostly tricking users into downloading harmful files or software to their devices.

Read More: NITDA warns Nigerian users of cyber threat linked to Spotify.