Props to Spotify for prioritizing content investment now rather than fall behind later. Sirius XM ( SIRI) acquired Pandora, Square ( SQ) bought Tidal, SiriusXM also invested in SoundCloud, and there is still the Apple Music ( AAPL) threat. These investments can only benefit Spotify long term, especially with growing consolidation in the industry. In that same month, they also acquired Gimlet Media which produces independent podcast content in the last two years, more have followed with the acquisitions of Parcast, The Ringer, and Megaphone which works primarily in podcast technology. Spotify has implemented Anchor into their structure by creating music talk shows similar to radio shows, except listeners can interact directly with the shows and add songs to playlists.Īrtists can also create a podcast show using Anchor, implementing their music, which gives them some creative control.
They acquired Anchor in February of 2019 that allows users to create and distribute their podcasts.
Spotify has invested a great deal of money in expanding its lineup of original content with podcasts, music content, sports, entertainment, etc. Spotify has zero long-term debt, an improving current ratio, and above all delivered 20% in quarterly YoY revenue growth. The stock price is now at $287, it could go down further, but this price is a good deal, too. Spotify has shown that it can deliver good returns as seen in 2019, and it is known to navigate trends quickly. Why would you want to invest? Original content in the forms of podcast and music integration, a great year in 2019 hints that the future can be brighter for Spotify, and the stock is down nearly 20% from its high. Hear me out, return on equity negative 20%, gross profit margin 25%, and EPS will return you $3 in losses. Spotify ( NYSE: SPOT) is the stock to buy. Photo by Spencer Platt/Getty Images News via Getty Images Investment Thesis
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