A week after Spotify’s share price hit an all-time low, Spotify CEO Daniel Ek announced on Twitter Thursday (May 5) that he’s purchased $50 million of the company’s stock.
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
Spotify’s share price dropped 13.3% to $95.74 on April 28 after the company’s first-quarter earnings release showed slower-than-expected subscriber growth in the quarter and provided an underwhelming outlook for the second quarter. Through Thursday, Spotify is down 54.9% year to date and 72.7% below its all-time high, $387.44, reached on Feb. 22, 2021.
Normally, a CEO discloses purchases and sales of the company’s stock through a Form 4 filing with the Securities and Exchange Commission. “While I’m not required to disclose these purchases because of our foreign company status,” Ek added, “I thought it was important for shareholders to know.” Spotify is listed on the New York Stock Exchange, headquartered in Sweden and incorporated in Luxembourg.
It’s not unusual for CEOs to buy their company’s shares in a show of support. Live Nation CEO Michael Rapino purchased $1 million of the company’s shares in March 2020 after investors fled many out-of-home entertainment stocks at the onset of the COVID-19 pandemic. That optimism has been rewarded: Rapino paid an average of $38.98 for shares that traded at $95.13 on Thursday.
Ek is Spotify’s largest single shareholder with 16.7% of common shares, according to the company’s 2021 annual report, that were worth $3.4 billion at Thursday’s $105.59 closing price. Co-founder Martin Lorentzon, the second-largest shareholder, owns 10.9% of common shares.
