Spotify filed a Form F-1 Registration Statement with the SEC yesterday in order to go public. Here is the filing:
https://www.sec.gov/Archives/edgar/data/1639920/000119312518063434/d494294df1.htm#rom494294_24
I love Spotify and use it all the time… what a great app! The ability to listen to music you did not have to buy is something I consider a great luxury. Times have certainly changed, and I feel Spotify was a great way to slow down the prevalent piracy in the music industry and find a decent way to reward artists – really a win, win for everyone as I see it.
Despite my love for the app, I am staying away from the company as an investment based on my review of the financial information contained in the Form F-1 prospectus. Spotify’s revenues have been increasing by about $1 billion each of the last couple of years, but their losses keep getting bigger and their gross profit margin on their sales is razor thin. Revenues were $1.9B, $3.0B, and $4.1B for 2015, 2016, and 2017, respectively, but their losses were $230M, $539M and $1.2B, respectively. I am an old school investor, and feel companies should be making profits for their investors and that is how a company should be valued, as opposed to trying to determine a company’s value on gross sales growth with continued losses – any slowdown or missed growth targets will tank the investment as there is little substance behind the valuation.
These IPOs for companies that have never turned a profit are a way for the existing owners and private equity investors to cash out of their positions, as there is finally a market for their shares. I am staying away, but of course, do your own due diligence and make your own investment decisions!
Should Uber or Lyft go public, I will stay away from those as well as it is a similar situation with growing revenues but big losses and a business model that seems like it will never be profitable.
Good luck,
Brian
Ya, but people will buy it up, I am surprised Sirius hasn't bought it yet. I would assume a direct competitor
On the plus side, there should be some huge volatility in early trading for folks willing to play the game. Never been my forte (I hate thinking about crypto on a daily gains and losses) but for those who are brave enough, by all means!
Hello Friend how are you? the truth is this is a great application personally I love spotify I have my songs there and they are not pirated as it happens on the internet that we download a song from a certain platform and many times it is downloaded badly or it is incomplete, now you see it from the point of investor and it's nice that you share with us
I can't agree with you more. In fact I just wrote a post on steemit about the overvaluation of Spotify. Would be cool if you checked it out. I also discuss some blockchain check will help shape the music industry into something new.
https://steemit.com/music/@rumble/spotify-ipo-valued-at-usd20-billion-plus-what-this-means-for-blockchain-music-dapps-like-peertracks-find-your-creative-freedom
I think this is the case with so many new tech IPO’s. they come out and prices suede based on hype and sales but people don’t look at the bottom line closely enough. Fitbit was one not long ago. Released with crazy hype and now is floundering.
Hello friend @brian.rrr I hope you find yourself well, without a doubt Spolity has been a unique application since the way music was downloaded there was original and made it different from the others, and with the creation of this application of course they went down much the piracy of the songs, since they had seen many copies and other websites that are not on the shoulder of spolity, I had the opportunity to download music there a couple of times through a smart phone and really that the way music is downloaded there is clean and accurate, and well read this has had many losses is unfortunate because it is an excellent application, but maybe one of the reasons that are lowering the profits is that today there are too many other applications to download music parallel to this, as it is the case of itunes, Ares, among others. But of course none like Spolity, I just hope that as the days go by, the application starts to rise and all that money has been lost, recover it, because for the quality that is the application should not be having those perdinas of money you have. Excellent and informative friend Brian publication, you really inform us of new things every day. regards
It's amazing what people will buy these days. When most of these companies go public, don't buy right away, wait a little while for the price to freefall. Then, once it's better positioned and the board have all gotten their cashout, buy in and ride it back up a little ways. Or just stay away since they're probably still not profitable.
Did you read that Snap's CEO just got a $630 million BONUS for last year. The company is still losing money and (I believe) losing users. It's insane! Still, people are free to throw their money at whatever they want.
Coming from crypto, evaluating stocks seems much more difficult
Good to see there are more stock investors on Steemit. There is nothing like a porfolio including stocks and cryptos 😥
this is a good tropic for me. Spotify - Great App, bad investment this is a right.i agree with your opinion. I had the opportunity to download music there a couple of times through a smart phone and really that the way music is downloaded there is clean and accurate.i appreciate of your post.thank you for your good motivation friend.. @brian.rrr
in my opinion if income increases and got the loss, this is just the us loss in investment, the goal of investing is to look for profits!!
I agree with you "Spotify - Great App, Bad Investment"
Thanks @brian.rrr for interest topic
I heard about spotify I have not had the opportunity to use it I do not have a smart phone yet but my friends if they use it and I have also read on the internet as now your post is right when you say that this platform helped to stop the piracy of the songs a bit , now I did not know that they lost so much money, interesting your post @brian.rrr
Why is it that they are having such a heavy loss of money? if as you say the application is good, you get good quality songs and I think it is the favorite of many, this platform has a great success I think you hear more of spotify than youtube. Good analysis
Good info @brian.rrr. I love Spotify too, but didn't realize the financials behind it. Thanks for offering this info. It seems like a lot of these "newer" models of business operate in a different market, one where loses creep into profits. All in the hopes of loads of users. Perhaps that's the trend, but I'm wary of investing in such companies too.
It is more rewarding being the old school as you say although the new applications give me many questions to think about and how to use them.
@calitoo
Web app is quiet hectic, you have to keep screen on then only it gets buffered and you listen the song, if by mistake the screen goes on sleep mode the song will play to the point where it was buffered before and after that the song stops playing, you then have to unlock the phone and play again...
A lot more direct, I feel with the huge "shuffle" button on the mobile apps make it way easier to get to your music.
If you have an iPhone, you get access to Spotify's new running feature which creates the perfect non-stop playlists that follows your running rhythm with the gyroscope in each iPhone.
The web app doesn't work with multimedia buttons. If I want to switch songs / pause etc on the web app, I have to find the tab/window, then change the track. With the program, I just tap the relevant media key. Far quicker.
I like spotify
Spotify is a good app for download music from Smartphone but not to invest, You bring in discussion a good topic
I always use spotify every day.
It is only unfortunate that we dont have spotify service in my country
Ok sure sir I'll try soon
Thank's for tell 🤗
yes whenever you goes public you must take certain preventive measures to control the loss.
like wise spotify is growing but on another side their loss ration is also going up.
i am also facing downloading issues as it takes too long to download any sort of song.