Spotify’s share price fell 9% on Wednesday (February 3) after the company’s earnings for the fourth quarter of 2020. At the end of the day, Spotify traded at $ 317.56, down 7.97% from the closing price of Tuesday, and lost Market Capitalization of $ 5.27 billion.
Investors did not drop the price due to Spotify’s financial performance in 2020. In fact, Spotify has handled the pandemic well and probably benefited from the broader shift of consumers to streaming media, especially video services like Netflix and Disney +. Revenue was $ 9.48 billion and subscriptions rose by an impressive 11 million – the most in four quarters – to $ 155 million, beating revenue and subscriber growth forecasts in the fourth quarter. The average revenue per user was $ 0.19 less than in the previous year, which is less important as Spotify launches into new markets and adds subscribers, many of whom have family plans, on a good cut.
Instead, the Spotify share price fell because lead over 2021 revenue and subscribers was lower than analysts had expected. After 2020 with 345 million monthly active users, Spotify predicts that the number will grow to between 407 million and 427 million by the end of 2021 with $ 10.8 billion to $ 11.3 billion in revenue – by 14% to 19% % compared to 2020.