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Spotify shares sank by 11% due to pessimistic earnings forecast

Spotify shares were affected by less than completely positive earnings reports. (Source: djtimes.com)
Spotify shares were affected by less than completely positive earnings reports. (Source: djtimes.com)
The shares of the company Spotify were down 11% at the start of today (November 1, 2018) due to a forecast that shows relatively poor fourth-quarter performance. In addition, Spotify is now reported to be committed to new investments to boost innovation and future-proofing in its products.

Spotify's share price experienced its biggest drop in 6 months as analysts were not impressed with its performance. The paid music service reported an increase in paid accounts to make a total of between 93 and 96 million by the last quarter of this year. However, this still fell below the pre-existing projections for the same quarter.

In addition, the company's actual revenue dropped by about 6% per subscriber. This was attributed to Spotify's new family and student plans, which brings in more users, but not for more fees. Therefore, their shares dropped by 11% this morning. Then again, the company has been reported to have clawed about 6% of this loss back by now.

This news was particularly surprising as Spotify actually posted a profit this quarter. However, it also announced that this would probably be eaten by a new program of spending in order to keep the company ahead of its competitors (e.g. Apple Music) in terms of music-streaming technology and techniques.

 

 

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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2018 11 > Spotify shares sank by 11% due to pessimistic earnings forecast
Deirdre O Donnell, 2018-11- 1 (Update: 2018-11- 1)