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Spotify’s senior executives and board members have taken advantage of the music streamer’s soaring stock price by selling $1.25 billion worth of company stock, including a $900 million payout to its two co-founders in 2024.
Stock sales increased in November and December, with a total of $1.2 billion sold by about 20 executives and board members during the year, according to a Financial Times analysis of U.S. Securities and Exchange Commission filings. It is said that $50 million was converted into cash.
Spotify’s stock price, listed on the New York Stock Exchange, will nearly triple by 2024, with its market capitalization hovering around $100 billion. This is a sharp turnaround from 2022 and 2023, when the group’s share price fell to an all-time low and its market capitalization traded at less than $20 billion.
Long-time employees and executives are now reaping financial benefits. Combined with the co-founders’ deals, the stock profits were funneled to the upper echelons of the company’s leadership. Palantir founder Alex Karp and computer mogul Michael Dell also made more than $1 billion in sales this year, according to SEC filings.
According to securities filings, some of the Spotify stock sales were carried out pursuant to pre-arranged sales plans common among chief executives who are compensated with company stock, which was not the case. There were some things. “As part of our long-term financial planning, several Spotify executives have sold a portion of their Spotify stock,” a company spokesperson said.
CEO Daniel Ek, who founded Spotify in Sweden with Martin Lorenzon in 2006, sold $350 million worth of stock in 2024. Most recently, on December 11th, the company sold its stock for $28 million in cash. Bloomberg estimates Ek’s net worth at more than $7 billion.
Lorenzon remained on Spotify’s board of directors and sold more than $550 million worth of stock in 2024, according to an SEC filing.
Gustav Söderström, Spotify’s chief product and technology officer who has been with the company since 2009, sold more than $106 million in stock in 2024.
Chief human resources officer Katarina Berg sold $38 million worth of stock, and chief business officer Alex Norström made a profit of $63 million from stock sales during the year.
Public relations executive Dusty Jenkins, who joined Spotify from retailer Target in 2017, sold more than $6 million in stock this year.
Netflix CEO Ted Sarandos, who has been on Spotify’s board since 2016, made $6 million this year by selling Spotify stock.
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Spotify and Netflix have emerged as the undisputed winners of the ‘streaming wars’, with a significant lead over their competitors in the music and TV space.
Wall Street applauded Ek for his new focus on profitability. After laying off a quarter of its employees in 2023 and increasing subscription prices, Spotify is turning a profit in each quarter of 2024. It is profitable without sacrificing subscriber growth. The streaming group continued to add customers at a breakneck pace even as it raised prices in dozens of countries.
Analysts at Bank of America raised their stock price forecast for Spotify in November, citing “incredible” profit margin performance this year.
“Spotify has long had a strong unique product offering and growth opportunities,” Morgan Stanley analysts wrote. “We are starting to see revenue opportunities in 2024.”
