Why Are Spotify Insiders Filing Form 144?

Online shopping and entertainment sites reached their peak in 2020, due to the COVID-19 induced lockdown, & audio streaming service Spotify Technology SA (SPOT: US) was among them. The stock, SPOT, which started 2020 with a closing price of €134.85, ended the same year with a closing price of €259.35, showing off a price surge of approx. 92.32% in 12 months. 

But in the following year of 2021, SPOT began budging up and down. The price fell significantly, and the company’s current M Cap is standing on €25.61 B, as of March 28, 2022.

Insiders Selling & Prices Dropping

For a while, Form 144s are the only thing that have been pouring out from Spotify Insiders' pockets.

In a recent move, Daniel Georg Ek filed a Form 144 on March 24, 2022. The filing stated his plans to sell 814,288 shares worth almost €110.48 M, through broker FIDELITY BROKERAGE SERVICES LLC. Ek co-founded Spotify in 2006, and currently serves as the company’s Chairman and CEO.

Prior to Ek, three insiders filed Form 144s in 2022:

  • Horacio E. Gutierrez, former Chief Legal Officer, who made plans to sell 1,830 worth nearly €396K, on January 03, 2022. He exited the company on January 01, 2022.
  • The Chief Premium Business Officer, Alex Norström, filed his own Form 144 on February 24, 2022. The planned 13,174 shares are worth almost €1.76M
  • Dustee Tucker Jenkins - Global Head of Public Affairs - planned to sell 10,300 shares for a value of approx. €1.39M on February 25, 2022.

On the stock market’s first trading session in 2022, the stock closed at €207.70. Since then, SPOT stock’s value has been declining gradually, only rebounding slightly on January 31 and February 1. On March 28, 2022, SPOT’s closing price was €131.90, showing an almost 36.5% decline in value.

Does All the Good News Make SPOT a Good Buy?

According to the music platform’s Q4 earnings report, the number of Spotify’s Monthly Active Users rose to 406 million in the quarter, and premium subscribers went up to 180 million. Additionally, Spotify’s August’21 share repurchase program is still ongoing, and in 2021 alone, the company repurchased shares worth almost €89 million. The same report, however, showed bleak predictions for Spotify’s Q1 of 2022, which may have resulted in stock prices diving. 

Another positive signal from Spotify was its acquisition of Podsights and Chartable, as announced on February 16, 2022. Both the latter companies deal in the analytics of mapping podcasts; Podsights serves those advertising podcasts and Chartable is a tool for podcast creators themselves to boost their listeners’ numbers. 

Multiple Insiders are filing Form 144s but thanks to these announcements, Spotify is not a stock dying down any time soon. Much of its success can also be attributed to its lack of competitors. Regardless, the stock is expected to last in the long term given that it can keep its earnings and users numbers steady.

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