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Spotify stocks dropped, Quarter 2 revealed

Spotify is a Stockholm-based audio entertainment platform which is the leader in terms of music streaming. When the COVID-19 pandemic started in 2020, the company added 74 million subscribers in this year alone. Due to this, the stock SPOT has grown a lot from $150 last January of 2020 to $311 on January pf 2021, and even spiked to about $387 on its peak in February 2021.

Now, the stocks are trading at about $232 a piece, which is greatly alarming for those who has the stock or those who are planning to buy the stock. Many were left with the question “What happened?”

SPOT has declined to the low $300 even before February 2021 ended, then traded around $250 to $300 in March and April, then dipped again in May. Though the dip had been a far cry from its original price of $150 in 2020, the drop definitely isn’t something that investors of Spotify would want to see.

Analysts have identified that SPOT stock have been affected mostly by the Q1 earnings report which reflects that the podcasts had only been engaged by 25% of the subscribers, and it didn’t mean that they listened to it from start to finish. There is also the monthly active user growth that didn’t grow as they have predicted. The increase was only 3 million even after they’ve opened up services in South Korea with a population of 52 million, as well as to other nations.

The stump in the growth rate comes as other competition improves the services they offered. Amazon now has the Amazon Music HD as a free upgrade from their current Amazon Music Unlimited, and it only cost $7.99 compared to Spotify’s $9.99 per month subscription.

Tidal came up with premium hi-fi streaming plans after an investment from Square, which technically gave it financial backing and a solid tech partner.

Apple, on the other hand, announced that Spatial Audio with Dolby Atmos technology will be available to the song catalogue with no additional cost. These factors have caused Spotify’s subscriber growth into deceleration, and even lower growth is being expected for 2021’s Q2.

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