Spotify Bosses Cash In as Streaming Service Stock Soars

Spotify executives, including its co-founders, have cashed in over $1.25 billion worth of company stock in 2024, capitalizing on the music streamer's soaring share price, reports the Financial Times. This comes as Spotify's stock has nearly tripled in value this year, reaching a market capitalization of close to $100 billion.

The $1.25 billion sum was realized by approximately 20 executives and board members, with stock sales accelerating in November and December, according to the Financial Times' analysis of US Securities and Exchange Commission filings.

This surge in executive stock sales coincides with Spotify's remarkable turnaround. After experiencing a significant dip in its share price in 2022 and 2023, the company has seen its stock value skyrocket, driven by increased profitability and sustained subscriber growth.

Co-founder and CEO Daniel Ek, who founded Spotify with Martin Lorentzon in 2006, has personally sold nearly $350 million worth of stock in 2024, including a recent $28 million transaction on December 11. Bloomberg estimates Ek's net worth at over $7 billion.

Lorentzon, who remains on Spotify's board, has sold over $550 million worth of stock this year, according to SEC filings. Other executives, including Chief Product and Technology Officer Gustav Söderström, Chief Human Resources Officer Katarina Berg, and Chief Business Officer Alex Norström, have also realized significant gains from stock sales.

These stock sales, some of which were executed through pre-arranged divestiture plans, reflect the substantial financial rewards reaped by Spotify's leadership as the company navigates a period of unprecedented success.

Spotify's turnaround story is characterized by a renewed focus on profitability. Cost-cutting measures, including a significant staff reduction in 2023, coupled with strategic price increases, have driven the company to profitability in every quarter of 2024. This has been achieved without compromising subscriber growth, as Spotify continues to attract new users at a rapid pace.

Wall Street analysts are optimistic about Spotify's future prospects, citing its strong product offering and growth potential. Morgan Stanley analysts note, "Spotify has long had a uniquely strong product offering and growth opportunity...In 2024, we have begun to see the profit opportunity emerge."