Daniel Ek’s Holiday Boost
We’ll go ahead and guess that Daniel Ek had a holiday to remember.
The Swedish co-founder and CEO of Spotify received US$27.72 million in the company’s stock on December 23rd, providing a solid boost to anyone’s budget for late holiday gifts.
Significant Share Sales
Indeed, during December, according to SEC filings verified by MBW, Ek cashed out some $93 million in sales of SPOT shares.
These sales occurred in three transactions: approximately $37 million was deposited on December 4, followed by $28.3 million on December 11th, and this $27.7 million withdrawal of funds on December 23.
Regular MBW readers know we’re keeping a close eye on Spotify share sales by Ek and its management team in 2024 – the year when SPOT stock price on the New York Stock Exchange reached a record high.
At the end of November, we calculated that Ek and fellow Spotify co-founder, Martin Lorenzon, together cashed out about $840 million from 2024 to the present.
With Ek’s December sales taken into account, that figure for all of 2024 will rise to nearly a billion dollars, totaling $932.8 million.
Total shares cashed out by Ek amounted to an aggregate market value of $376 million in 2024.
Lorenzon’s sales of shares, often carried out through his Rosello company, generated $556.8 million during 2024 (unlike Ek, Lorenzon did not cash out any shares in December).
Another executive who profited in 2024 from Spotify shares is Barry McCarthy.
McCarthy, former Spotify CFO (and current board member), cashed out shares worth just over US$50 million last year, according to SEC filings.
McCarthy joined Ek by selling some shares in December, offloading 21,000 shares of Spotify common stock for $10.17 million.
Spotify PR Director Dusty Jenkins also cashed out shares in December, selling 10,399 shares with an aggregate market value of $5.22 million.
Adding these alongside Daniel Ek’s December transactions, we find that Spotify management, including members of the company’s board of directors, have collectively cashed out a total of US$1.25 billion in 2024.
Why has there been such a flurry of insider share sales at Spotify last year? The answer is clear: SPOT’s rapid growth in stock prices in 2024.
At the close of trading on the New York Stock Exchange at the end of 2023, Spotify’s market capitalization was approximately US$36.6 billion.
By the close of trading in December 2024, the market capitalization skyrocketed to US$94.0 billion.
Spotify’s market capitalization even briefly exceeded 100 billion dollars in early December when the price of the firm’s individual shares surpassed 500 US dollars for the first time.
As of publication (January 6), Spotify’s share price on the NYSE is $466.67, reflecting a market capitalization of $93.75 billion.
Spotify is set to announce its quarterly financial results for the fourth quarter of 2024 on Tuesday, February 4th.
When announcing results for Q3 2024 in November, Spotify forecasted quarterly revenue of €4.1 billion in the fourth quarter, along with a quarterly operating profit of 481 million euros.
If Spotify meets this guidance, the annual income will amount to approximately 15.5 billion euros with an annual operating profit of 1.37 billion euros.
