Spotify stock hits lowest price since March 2020. Can stocks rebound?
Spotify (NYSE: SPOT) stock broke 3.46% of its value today and briefly hit a 52-week low of $134.09 per share. Now many are speculating about SPOT’s short-term trajectory and long-term outlook.
At market close today, Spotify stock was worth $135.17 per share, having rebounded from the aforementioned 52-week low of $134.09 per share that occurred earlier in the afternoon. SPOT’s end-of-day value reflects a 10.86% drop from Monday morning, when the shares were trading around $152 each, as well as a more than 50% drop from the start of March 2021, when the shares were hovering around $275 each.
Additionally, Spotify’s current stock value is the lowest since the onset of the COVID-19 pandemic in March 2020, when SPOT fell into the low $120s. (The title then rebounded slightly in April 2020 and, following the May 2020 announcement that Spotify would become the exclusive home of The Joe Rogan Experienceembarked on an ascent that culminated in a price of nearly $365 per share in February 2021.)
As for possible reasons for Spotify’s stock pullback – and SPOT’s way forward – Russia’s invasion of Ukraine, inflation and related concerns “will continue to dominate markets over the week. to come,” according to finance professionals. The S&P 500 fell 1.3% this week, while the NASDAQ lost 2.8%.
It’s possible that the conflict in Ukraine is also contributing to SPOT’s woes due to its impact, especially on Spotify’s operations. Spotify rolled out to Russia (along with 12 other European countries) in July 2020, and Q3 2020 highs said the launches had “unlocked significant pent-up demand… with Russia being the biggest upside driver “.
Markets including Russia made “significant contributions” to total monthly active users (MAUs), Spotify revealed in Q1 2021, and executives in Q3 2021 acknowledged their partnership “with the largest all-digital bank of Russia” to offer fans three-month free trials.
But as Spotify closed its office in Russia and kicked state media out of the platform, it remains to be seen whether domestic subscription targets will materialize in the first quarter of 2022. Additionally, the Russian government has blocked today access to Twitter and Facebook nationwide.
The points are significant as Spotify in Q4 2021 forecast 418 million MAUs and 183 million subscribers for the following quarter – the latter total representing an increase of just three million. Of course, Russia and its more than 144 million people factored in that modest subscriber estimate, which seemed to sway many investors to sell SPOT.
Granted, Spotify stock was worth over $200 per share in early February, and SPOT suffered a double-digit decline immediately following the release of the Q4 2021 earnings report. Nonetheless, it should be noted in conclusion that several investors are extremely optimistic about SPOT’s long-term potential.
And today, investment firm The Benchmark Company set a target value for Spotify stock at $260 per share, estimating that “the current share price implies only 250 million premium customers in 2030”.