Spotify Stock (SPOT) Drops Below Its 2018 IPO Price — Nearly $17 Billion In Market Cap Wiped Out In 2022 Alone

Spotify’s closing price on February 24th, 2022.

Back in 2018, Spotify was the disruptive darling of Wall Street and a pioneer in direct listings. Now, the once-surging Spotify stock (SPOT) has officially crashed back to earth.

Spotify’s once-heady stock has now tumbled below its opening price in 2018, with potentially further downward pressure ahead. In Wednesday (February 23rd) trading, Spotify stock (SPOT) dropped below its symbolic $147.92 valuation, established on the company’s first day of trading on the New York Stock Exchange.

Early Thursday morning, SPOT tumbled to a 2022 nadir of $136.89 amidst heightening concerns surrounding Russia’s invasion of Ukraine. By the closing bell, a late-stage rally pushed SPOT back to $149.21, a scant 1% above its 2018 start.

The drop means that Spotify stock has lost an astounding $16.57 billion in market cap in 2022 alone. Over the past 12 months, that loss expands to $30.2 billion. Since this point last year, SPOT has tanked by nearly 154 points, or 51% of its total share value.

It should be noted that this isn’t the first time that Spotify has dropped below its 2018 direct listing price.

After its ‘non-IPO’ direct listing, shares struggled to regain their footing for years. It wasn’t until mid-2020 that Spotify surged past its initial price tag. By February of 2021, shares had reached a peak of $339.20 as locked-down music fans propelled streaming platforms. Since that point, SPOT has dramatically shed nearly 200 points.

SPOT’s plunge is rooted in a nasty mix of elements happening both inside and outside the streaming giant. On the outside, continued insecurity over rapid inflation and expected rate cuts by the Federal Reserve are rendering Spotify a risky bet. That has now been compounded by growing global instability, with Russia’s advance on Ukraine potentially triggering a range of problems for gas prices, global trade, and broader conflict.

Unfortunately, Spotify is anything but a darling in these treacherous times. Investors first started dumping shares amidst continued profitability problems. Sure, Spotify leads the roost in music streaming, though its underlying financials remain in the red. Spotify CEO Daniel Ek’s ‘go big or go home’ strategy has worked wonders for nearly a decade. But now, markets are growing cautious around heavy-spending, profitless tech companies.

That recently came to a head when Spotify revealed that premium subscriber gains may be plateauing.

Earlier this month, Spotify posted a respectable 8 million premium subscriber gain over the past quarter alone. That raised the total number of paying subscribers to 180 million, a previously unthinkable accomplishment. However, during the current quarter, Spotify is now projecting a gain of just 3 million premium subscribers, part of a financial picture and broader projection that failed to impress Wall Street.

In that soup, it now looks like Joe Rogan is actually the least of Spotify’s problems. A roiling feud involving Neil Young never materialized into a mass exodus of artists, and Spotify stood by its favorite podcaster. Wall Street seems to favor Rogan, as well: just last week, SPOT tanked momentarily after The Joe Rogan Experience became unavailable on the Spotify platform.

Once the glitch was resolved, the stock popped back up.