Spotify’s stock dropped about $30 per share on Tuesday

Last Wednesday Spotify’s stock dropped abruptly, causing the music streaming giant to lose up to 8% of its value.

The drop came after the Swedish service publicly released its fourth quarter earnings. Investors seemed to have sold off their shares due to several reasons.

The company posted a modest growth forecast for the first quarter of 2021. The 8% loss equates to approximately $30 per share. SPOT opened at $345.43 per share on Tuesday February 2nd and closed at $317.21 in the evening.

Predictions in the report claim that the streaming service will have somewhere between 155 million and 158 million paid subscribers during the first quarter of 2021. A sharp drop from 2020’s fourth quarter which gained 11 million users.

Podcast Accountability

Another reason for Spotify’s drop in share price could be accounted to other factors.

Podcast listenership may also have contributed to the mass exodus of shareholders. Just 25% of monthly active users are listed as ‘interacting’ with podcasts. Interaction doesn’t necessarily indicate listeners, however Spotify was able to boast podcast exclusivity with ‘The Joe Rogan Experience‘.

We may see increases in share values once podcast listenership increases. The November 2020 acquisition of podcast publishing platform ‘Megaphone’ after a $235 million deal certainly can’t have hurt Spotify’s position in the podcast market.

It will be interesting to see how Spotify entices new paid subscribers to their service. The recent expansion into South Korea, with a paid-only platform looks to be just the beginning of a new set of services.

While this stock drop may have come as an unexpected shock to investors on the New York Stock Exchange, the future is still looking up for Spotify.

At the time of posting, SPOT has been slowly creeping back up and is currently sitting at $323.50 on the NYSE.