Spotify is a profitable company—and the market is happy about it.
Shares of the streaming service surged approx. 14% listed on the New York Stock Exchange on Tuesday (July 23) in response to news that it had posted a second consecutive quarter of profit this year, exceeding its second-quarter guidance for premium users, gross margin and operating income.
Spotify shares continued to rise on Wednesday, after falling slightly on Thursday. As of the time of publication, SPOT’s market capitalization on the New York Stock Exchange is $65.2 billionwhich is approximately $23 billion higher than Universal Music Group’s equivalent market capitalization on Euronext (approximately $42 billion at current exchange rates).
According to new filings with the U.S. Securities and Exchange Commission, prominent individuals Spotify Executive Shareholder They wasted little time cashing out their shares after the stock price rebounded.
MBW discovered an SEC filing dated Thursday (July 25) that revealed the identity of Spotify’s co-founder Martin Lorenson now selling 255,000 common stock with a total market capitalization of $85.8 million. Goldman Sachs acted as broker for Lorenzo’s stock sale.
This sale is made through roscello gmbha holding company registered in Cyprus, owner Almatyis a Luxembourg-based company whose sole shareholder is Lorentzon. The vast majority of Lorentzon’s shares in Spotify are held through Rosello.
This is the second time in the past few months that Lorenzo has cashed out some of his funds. Spotify in stock.
In June, Lorentzon sold a batch of 255,000 shares, $81 million in value.
So over the past two months, Lorenzo has delivered $166.8 million Two trades held Spotify stock.
According to Spotify’s latest annual report, as of the end of 2023, Lorentzon is Spotify’s third largest shareholder. 10.9% Outstanding shares behind SPOT co-founder/CEO Daniel Ek (15.6%) and Edinburgh Investment Company Bailey Gifford (12.0%).
The shares Lorenzo sold this week represented only a small portion of his total holdings. this 21,476,145 The value of his SPOT shares at the end of 2023 is approx. $7 billion Based on the company’s share price at the close of trading on Thursday (July 25).
Lorenzo resigned from Spotify’s board of directors in 2016 after eight years as chairman.
Lorentzon isn’t the only Spotify executive to cash in a chunk of stock this week.
According to a document filed with the U.S. Securities and Exchange Commission (SEC) on Wednesday (July 24), Alex NostromSpotify co-president and chief commercial officer is for sale 78,218 The total market capitalization of the common stock is $26.4 million.
Morgan Stanley acted as broker for the stock sale.
at the same timeGustav SoderstromSpotify Co-President and Chief Product and Technology Officer is selling 52,788 shares of common stock with a total market value of $17.4 millionThat’s according to Wednesday’s SEC filing spotted by MBW.
Morgan Stanley also acted as broker for the sale of Söderström’s shares.
SPOT Chief Human Resources Officer Katarina Berg is selling 23,337 common shares with a total market value of $7.8 millionThat’s according to SEC filings discovered by MBW on Wednesday.
Morgan Stanley acted as broker for Berg’s stock sale.
According to Spotify, Berg “oversees all aspects of human resources management and is responsible for developing and executing people strategies in support of our overall business plan.”
Berg begins selling stock seven months after Spotify slashed stock 17% its global workforce, or 1,500 people jobs, with a round of layoffs in December bringing the total number of employees laid off globally to 2,300 2023.
elsewhereGong BenSpotify’s Vice President of Financial Planning and Analysis and Interim Chief Financial Officer sold 3,667 shares of common stock this week for a total market value of $1.25 millionThat’s according to a separate filing Wednesday with the U.S. Securities and Exchange Commission.
Morgan Stanley acted as broker for the stock sale.
The above-mentioned windfall for Spotify executives, coupled with the company’s record quarterly profit in the second quarter, paints a picture of booming music streaming on the world’s largest music subscription platform.
However, another group of music industry stakeholders may be in a less celebratory mood this week.
In an SEC filing released Wednesday, Spotify estimated it would have to pay about US$50 million If the Machinery Licensing Class (MLC) wins the tie-in lawsuit.
MLC filed a lawsuit against Spotify in the US in May, saying it underpaid songwriters and publishers over its decision to reclassify its premium plans as “bundles” because those plans now offer access to audiobooks. Royalties.
According to Spotify’s SEC filing: “If MLC is fully successful in this case, the additional royalties payable from March 1, 2024 to June 30, 2024 will be approximately 46 million eurosof which approximately 35 million euros Relates to the three months ending June 30, 2024, plus potential penalties and interest that we cannot reasonably estimate.
Spotify added: “We intend to vigorously defend this lawsuit.”
this 35 million euros [in royalties alone] Spotify will convert the three months ending June 30, 2024 (i.e., second quarter 2024) to $37.68 million.
That in turn gives us an idea of the annual costs Spotify’s “bundling” initiative will bring to publishers and songwriters in the United States, as well as the revenue they would have earned from the service under previous royalty settings.
If Spotify were willing to pay US$37.68 million (35 million euros) Following bundling changes in March that reduce machinery royalties per quarter, SPOT’s machinery royalties will be reduced by approximately US$150 million Within one year after the change.
Spotify Co-Founder and CEO Daniel Ek So far, no shares of the company have been redeemed following the company’s second-quarter results.
In recent months, however, Ek has cashed in a significant amount of his stock. In April, he sold 400000 Spotify shares have a total market capitalization of $118.8 million.
This is the fourth action in the past 12 months I cashed in some of his Spotify in stock:
Across these four transactions (including April), Ek cashed in approx. $340.5 million Has owned Spotify stock since last summer.
Under a 2022 legal settlement known as Phonorecords IV, music publishers and music streaming services agreed that U.S. “bundled” services could pay publishers and songwriters lower mechanical royalties than standalone music subscription services rates.
The MLC is a nonprofit organization designated by the U.S. Copyright Office to ensure that Spotify and other streaming services pay songwriters and music publishers the mechanical royalties they are owed.global music business
