Spotify Loses $9 Billion in Market Value in the Past Three Months: Should we be Worried?

Over the past three months, it becomes apparent that Spotify’s total value on the US market has experienced a noticeable drop in value. The US market in its entirety has been experiencing an instability since October, causing companies like Spotify to decline drastically. By the end of this recent Wednesday, the share value of Spotify dropped to a low $146.08 and since late July the major streaming service has lost a total of $9 billion in value.

Directly after the inception of Spotify’s appearance on the US stock market (which took place in April this year), there were signs of smooth sailing regarding the company’s total value. Spotify reached its peak value in mid-July of this year hitting a total of $196.28 per share and a $35 billion total market cap.

However since this all-time high for Spotify’s market value, things haven’t been looking up for the company. It’s been on a decline since July and today the organization is in a worse condition compared to how it started (a $2.69 difference). Today Spotify holds a total market cap of $26.1 billion.

Should we be worried for Spotify’s conditions in the near future? There are several ways one can analyze this drastic decline in Spotify’s share value. From an optimistic standpoint we can see that the United States stock market in general is far from thriving, therefore Spotify may just be a temporary victim to this overall market tanking. Also Spotify has been reportedly shifting its focus onto several generally untapped markets - countries such as Brazil, Mexico and India. These locations hold a great potential for Spotify as the countries’ populations are utilizing streaming more than ever. We’ll just have to see if Spotify can capitalize and flip this unfortunate event, caused by market decline, around for the better.

Writer: Bo Turner
Category: Announcements
Date: October 25, 2018