Spotify CEO Daniel Ek revealed that he is putting his money where his mouth is, releasing a Twitter message announcing that he will invest $50 million in the music streaming company.
“I’ve always been vocal about my strong belief in Spotify and what we are building. So I am putting that belief into action this week by investing $50M in $SPOT. I believe our best days are ahead..,” Ek said in a Tweet.
I’ve always been vocal about my strong belief in Spotify and what we are building. So I am putting that belief into action this week by investing $50M in $SPOT. I believe our best days are ahead…
— Daniel Ek (@eldsjal) May 6, 2022
The announcement came at a time when tech companies are falling out of favor with Wall Street. Ek has sought to distance Spotify from comparisons with video streamer Netflix, which recently revealed that subscriber growth had plateaued.
In late April, Spotify shares hit their lowest point ($95.22) since listing as a public company on the New York Stock Exchange. The stock has rallied since that time, but tumbled more than 6% on Thursday to $105.59.
Stocks worldwide were rattled Thursday by growing concern over economic trends, notably the persistence of inflation coming at time when economic growth is slowing in the U.S., China and other major economies. The Bank of England essentially said that the U.K is headed for a recession next year, while the U.S. Federal Reserve is still hoping to engineer a soft landing.
Ek further explained that because Spotify has foreign company status he is not obliged to disclose the share purchases, but “thought it important for shareholders to know.” That can be perceived as trolling of another celebrity tech entrepreneur Elon Musk, who was recently criticized for his tardy disclosure of a share stake in Twitter before he went on to announce a full bid for the company.
In the first three months of the year, Spotify added a net 2 million premium subscribers, to reach 182 million (up 15% year over year). That included approximately 1.5 million disconnects due to the company’s ceasing operations in Russia. Excluding the “involuntary churn” of Russian subs, growth was above expectations and subscriber gains outperformed in Latin America and Europe, according to the company.