Spotify co-founder/CEO Daniel Ek sold just over $100 million worth of his stock holdings in the company, according to a filing with the U.S. Securities & Exchange Commission on Thursday (July 27).
The amount represents the sale of 675,000 shares, which will be sold by D.G.E. Investments, an entity “indirectly wholly owned” by Ek, according to the SEC filing. Of those shares, 203,435 were acquired through a stock option exercise on July 13, 2020, the filing notes, while 471,565 were purchased by Ek on May 5, 2022 — a $50 million investment the CEO touted on Twitter that same day in a ploy to shore up investor confidence. The purchase occurred just a week after Spotify’s stock hit an all-time low of $95.74 following the company’s first quarter earnings report, which revealed slower-than-expected subscriber growth for the quarter and a disappointing projection for the second quarter.
“I’ve always been vocal about my strong belief in Spotify and what we’re building,” Ek tweeted at the time. “So I am putting that belief into action this week by investing $50M in $SPOT. I believe our best days are ahead…”
Spotify stock has rallied since then, closing at $144.52 on Thursday (a slight uptick from Tuesday, when it fell around 14% following the company’s second quarter earnings release). At that price, the 471,565 shares would have been worth around $68.2 million when Ek offloaded them — roughly $18 million more than what he purchased them for.
There’s no telling what Ek will use his earnings from the stock sale for, but the CEO — who became a billionaire following Spotify’s IPO on the New York Stock Exchange in 2018 — previously pledged to give away a large portion of his fortune. In 2020, he said he would invest 1 billion euros ($1.085 billion at then-current exchange rates) of his personal wealth in European technology companies. Since then, he has made investments both as an individual and through Prima Materia, The European investment company he and Shakil Khan co-founded in 2021. On July 5, his Swedish health-tech company, Neko Health, raised 60 million euros ($65 million) from a group of outside investors led by Klaus Hommels‘ Lakestar.
In its quarterly earnings on Tuesday, Spotify reported an 11% uptick in revenue to €3.18 billion ($3.51 billion) thanks in part to a rise in monthly active users (MAUs) and growth in premium subscribers. The company said it added 10 million net new premium accounts and reported a 12% increase in ad-supported revenue for the quarter, while MAUs rose 27% to 551 million, including 220 million premium subscribers. Nonetheless, investors were downbeat about the latest earnings report, which showed a 27% rise in quarterly operating losses year-over-year. Spotify executives said those losses will improve in the fourth quarter of 2023 and beyond as the company is set to implement its newly-announced premium subscription price hike in September.
This story originally appeared on Billboard
