It’s been some week for Daniel Ek.
Yesterday (April 23), Spotify‘s share value jumped up by over 11% following the corporate’s Q1 outcomes announcement, by which it confirmed its biggest-ever quarterly working revenue.
That share value rise gave Spotify a market cap of roughly USD $60 billion at shut of buying and selling on the NYSE yesterday, sufficient to exceed the market cap worth of music’s greatest rightsholder, Common Music Group.
(UMG’s market cap on the Amsterdam Euronext stood at roughly USD $53.5 billion at shut of yesterday, based on YCharts).
Spotify’s share value on the NYSE has settled again down immediately (April 24), falling by round 7% on the shut of buying and selling… however not earlier than Spotify CEO Ek cashed in a small mountain of shares.
In response to a submitting with the SEC noticed by MBW, Daniel Ek offered 400,000 share items in Spotify earlier immediately, with an mixture market worth of USD $118.8 million. JP Morgan acted as dealer for Ek’s share sale.
The transfer is the fourth time previously 12 months that Ek has cashed in a few of his Spotify inventory:
Throughout these 4 transactions (immediately’s included), Ek has cashed out roughly $340.5 million in Spotify shares since final summer time.
Ek’s newest $118.8 million cash-out comes as one explicit sector of the music enterprise – music publishers – isn’t feeling too enamored with Spotify.
Final week, Spotify confirmed that it had modified the method by which it pays out mechanical royalties to publishers and songwriters in america.
This alteration sees Spotify re-categorize its Premium subscriptions as “bundles”, as a result of they provide customers entry to each music and audiobook content material.
That is no arbitrary change: by re-categorizing Premium subscriptions as “bundles”, underneath phrases of a 2022 ruling from the US Copyright Royalty Board, Spotify believes it could actually pay a decrease charge of mechanical royalties for using music on its platform in america.
David Israelite, CEO and President of the Nationwide Music Publishers’ Affiliation, responded to information of Spotify’s ‘bundles’ re-categorization with fury final week, commenting: “It seems Spotify has returned to attacking the very songwriters who make its enterprise potential.”
Israelite added: “Spotify’s try and radically cut back songwriter funds by reclassifying their music service as an audiobook bundle is a cynical, and probably illegal, transfer that ends our interval of relative peace.
“We won’t stand for his or her perversion of the settlement we agreed upon in 2022 and are all choices.”
Daniel Ek was the single largest shareholder in Spotify on the shut of 2023, with possession/proxy possession of 30.86 million bizarre shares within the firm, or 15.6% of the entire, based on SEC filings.
Nevertheless, Ek held these shares by way of his D.G.E Investments car, and amongst the 30.86 million are 16.632 million shares finally owned by Tencent Holdings that Ek/D.G.E represents by way of “irrevocable proxy”.
Discounting these Tencent shares, Ek’s final private possession of bizarre shares in SPOT as of December 2023, then, was 14.224 million shares (together with warrants), which – by way of Spotify’s present share value – have been cumulatively value a shade over USD $4 billion on the time of publication of this text.
Yesterday (April 23), Spotify introduced its Q1 2024 outcomes, confirming complete income progress of 21% YoY (at fixed foreign money) to EUR €3.247 billion.
The corporate counted 239 million paying subscribers globally on the shut of March, up by 3 million vs. the top of 2023.
The corporate’s Gross Margin completed at 27.6% in Q1 2024, up from 25.2% in Q1 2023.
When it comes to profitability, Spotify posted an working revenue of €168 million ($182.41m), which it famous in its investor presentation was “a brand new quarterly excessive” and mirrored “decrease personnel and associated prices and advertising and marketing spend”.Music Enterprise Worldwide
