Spotify celebrated the four-year anniversary of its first public offering on April 3rd.
So, if you put $10,000 into $SPOT, you'd now have... $10,000.
On April 3, 2018, Spotify went public with a direct listing on the New York Stock Exchange. Spotify's LTM sales were around €4 billion at the time. And sales continued to rise.
So why hasn't the stock price remained high?
For now, Spotify is losing money. This is because a large portion of their earnings goes to the record companies, which hold the rights to the music. It is rendered meaningless without a select group of well-known musicians. As a result, the brands have some clout.
Spotify's sales have also been given a lower multiple by investors. Investors were ready to pay 4x P/S at the time of their IPO. That number has now dropped to 2.6x.
And businesses aren't valued based on their sales or revenue growth. Rather, it is based on how much CASH the company's stockholders expect to TAKE OUT.
It makes no difference how much income a firm generates if none of it is ever distributed as dividends.
- London Stock Exchange Group (LSEG) is continuing its acquisition spree, buying digital ID firm Global Data Consortium to help clients with know your customers requirements. Founded in 2012, GDC provides global name and address matching capabilities from over 300 data sources in over 70 countries. Phil Cotter, group head of customer & third-party risk solutions, LSEG, says: “This transaction delivers a compelling opportunity to acquire a strategic capability aligned to our vision of becoming a market leading global Digital Identity and Fraud (DI&F) solutions provider. The acquisition of GDC, combined with our existing capabilities from GIACT and Qual-ID, will enable customers to verify digital identity and protect against fraud globally with a suite of real-time, accurate solutions.” Read more.?
- Biometric face authentication technology company iProov has hired Miguel Traquina, Santander UK's chief information officer for operations and economic crime, as CIO Launched in 2013, iProov works with governments, banks and other enterprises to securely verify customer identity for effortless onboarding and authentication. Customers include the US Department of Homeland Security, the UK Home Office, the UK National Health Service (NHS), Rabobank and ING. Read more.?
- Banking API provider outfit Codebase Technologies has launched a white-label BNPL offering for banks, fintechs, lenders, and merchants. Raheel Iqbal, managing partner, Codebase, says: "BNPL providers are popping up worldwide and attracting huge numbers of customers, and banks especially are feeling the pressure. So, of course, they want to capitalize on this trend to compete and give customers better and easier ways to make purchases. "Our BNPL solution gives them a way to address that and launch their own BNPL offering quickly and cost-effectively." Read more.?
- Klarna plans to take on Amazon, Google and Facebook as a viable alternative market for online merchants following the completion of its $1 billion deal to acquire comparison shopping service PriceRunner. David Fock, Klarna’s chief product officer comments: “The acquisition will serve to strengthen our consumer offering and that Klarna will not be a marketplace but a viable and competitive alternative for retail partners vs Amazon, Google and Facebook. Klarna and PriceRunner are united in our fundamental belief that tech companies, no matter where they operate, compete on the basis of their own merit with the best products and services to gain consumers’ trust.” Read more.?
- Zopa bank has achieved a rare feat among UK challenger banks, hitting profitability for the first time just 21 months after acquiring its UK banking license. Since launch in 2020, the bank has attracted ￡1 billion in deposits, more than ￡1 billion of loans on balance sheet, issued circa 250,000+ credit cards and tripled its revenue per customer. Jaidev Janardana, CEO at Zopa bank says: “The past year has been a highly successful one for Zopa as we’ve exceeded our targets across new and existing products and raised $300 million led by Softbank to fuel our accelerated growth. Read more.?
- Barclays’ paper sets out a methodology for the mitigation of potential fragmentation risk presented by central bank digital currency (CBDC), through an architecture that places CBDC and commercial bank money on a similar footing. Written by two members of the Barclays Chief Technology Office, managing director, Lee Braine, and enterprise architect in advanced technologies, Shreepad Shukla, the paper explores how ecosystems can provide a “common programmability layer” that interfaces with account systems at both commercial banks and the central bank. Read more.?
- Mastercard has appointed Goldman Sachs' head of digital for transaction banking Chad Wallace as executive vice president for B2B Solutions. At Mastercard, Wallace will oversee the company’s commercial product offering, including its corporate travel and expense (T&E) management products, purchasing cards, virtual cards, B2B payments, and fleet card products, with a focus on enabling the digital transformation of corporate payments across accounts payable, procurement and treasury. “Chad is joining Mastercard at an exciting time where B2B and commercial solutions are essential in enabling the shift to a digital economy for corporates,” says Craig Vosburg, Mastercard’s chief product officer. “His digital products expertise, proven track record and high energy will support our continued focus to drive innovation in the B2B space.” Read more.?
- Some American Express Co. customers are facing further disruption as a systems issue limits access to the credit card-giant’s digital services, a company spokesperson said in an email Monday. The issue, which was also reported on Friday afternoon, is preventing some cardholders from making payments on the website and app. This has led to a backlog of customer care calls which is causing longer-than-usual wait times. Read more.?
- Mastercard has closed its acquisition of personalized engagement platform Dynamic Yield from McDonald’s, according to a press release Monday (April 4).? The addition of the decision engine company boosts Mastercard’s customer engagement and loyalty services that will in turn help brands deliver improved customer experiences. “Every day, we safely connect billions of people with their favorite merchants, brands and banks all around the world. Undoubtedly, consumers are hungry for highly relevant, right-place, right-time experiences,” said Raj Seshadri, president of data and services, Mastercard. Read more.?
- ING Group (ING) announced Tuesday that it has signed an agreement with Boursorama, a subsidiary of Societe Generale, to offer services to retail customers of ING in France. The contract allows ING customers to join Boursorama and benefit from a simplified account opening process and exclusive offers. Read more.
- New Balance has opened a manufacturing facility in Methuen, Massachusetts, the sneaker retailer’s fifth in North America. New Balance said the 80,000-square-foot space recently underwent about $20 million in renovations, before production officially kicked off in January. The footwear industry has been particularly whacked by Covid pandemic-fueled supply chain obstacles, including temporary factory shutdowns across both China and Vietnam. “It’s part of our overall mantra of controlling our destiny, which has really come into play in the last couple of years with Covid,” said Preston, in a phone interview. “The supply constraints have certainly impacted our business, but we were still able to grow [revenue] over 30% in 2021.” Read more.?
- Like most creative people, watchmakers rarely know when or where inspiration will strike. Karl-Friedrich Scheufele’s moment came in 2018, when he was sitting in a church in Saanen, not far from the Swiss ski resort of Gstaad. The co-president of family-owned watch brand Chopard was attending a performance by virtuoso violinist Renaud Capu?on. As the sweet notes of Debussy’s Violin Sonata in G Minor filled the air, Scheufele had a Damascene revelation: “I realized, then, that a minute repeater watch should be designed as a musical instrument as much as a timepiece and that it should deliver more than just an audible indication of the time of day. It should deliver emotion.” Read more.?
- An interview with Ben Francis, founder and CEO of Gymshark with Robert Tuchman ?for Entrepreneur — the first-of-its-kind, British fitness community and apparel brand for my recent episode of How Success Happens.Building a brand requires tireless hard work, yet what I found most notable about Francis throughout our conversation was his graciousness and easy-going demeanor. Despite Gymshark’s rapid growth, Francis has remained true to his founding ethos: building the brand as a community while staying humble. It’s no surprise that he largely attributes his success to the hardworking mindset instilled in him by his parents and grandparents. Read more.?
- While it is classified as a passive stake, investors were bidding shares higher on the chance this could lead to something more. Twitter stock surged more than 27%. “Musk could try to take a more aggressive stance here on Twitter,” Wedbush analyst Dan Ives said Monday on CNBC’s “Squawk Box.” “This eventually could lead to some sort of buyout.” Read more.?
- Open banking promised to democratize access to banking data and payments. It welcomed new players to unlock the potential of banking APIs to offer customers innovative solutions and more choices. Despite the noble intentions of the regulators and a framework for enabling the change, the current state of the open banking ecosystem has not yet fully lived up to the expectations. Read more.?
- Technology is evolving faster than ever before. In the next decade, it’s predicted that we’ll experience more technological progress than we have in the last 100 years combined. The fast pace of change, however, can be daunting for any business owner – and rightly so. How can you stay up to date with the latest technology trends when you’re busy running your business? And how do you spot the difference between a valuable trend or a fleeting fad? Read more.?
