What's going on?

Swedish audio platform Spotify streamed better-than-expected first quarter results on Monday � but investors didn�t playlist its stock, pushing its price down.

What does this mean?

Last quarter, Spotify added 4 million paying subscribers � more than the 3.3 million anticipated and enough to reach a total of 100 million. It�s the first audio streaming service to reach that magical number, 32% higher than subscriber figures this time last year � and Spotify�s hoping to reach the paying ears of up to 127 million audiophiles by the end of 2019.


Adding to its dulcet musical tones, Spotify�s been snapping up major podcast companies recently: it reckons that over 20% of its content will eventually be non-music audio. As well as being cheap to produce, the increasingly popular podcast format generates loyal followings and offers Spotify an opportunity to grow its advertising revenue. (Unlocked the Finimize podcast yet? No ads ?)

Why should I care?

For markets: The devil�s in the detail.

Spotify had disappointing ad-supported revenue last quarter: it shrank compared to the quarter prior, possibly thanks to tough competition driving down the price of advertising slots. But the value of Spotify�s stake in China�s Tencent Music swelled to $2.6 billion. The two streaming companies swapped shares in 2017 before either �went public�: Spotify downloaded 9% of Tencent Music (a stake then worth just over $1 billion) in exchange for 7.5% of itself. For now, it sounds like Spotify got the better deal: that 7.5% is still only worth about $1.5 billion.

The bigger picture: Will investors pick up the Slack?

When Spotify loudly went public last year it was via a �direct listing� � sans the investment banks that�d normally manage an initial sale of shares. Now, collaboration software company Slack is playing in the same key, eschewing bankers in its upcoming listing. Like many of 2019�s stock market debutantes, Slack�s losing money: $139 million last year, though it brought in $400 million in revenue.