How To Buy Spotify (SPOT) Stock

We often use a service and think, “I should buy stock in that,” without knowing if stock is available. Listening to music and podcasts with Spotify might be an almost religious experience for you, connecting you to all the sounds you love. But, can you invest in Spotify?

Without a doubt, Spotify, like its predecessors Pandora, iTunes, and Napster, has revolutionized the music industry with its freemium model. The company went public on the New York Stock Exchange in early 2018.

Do you think you’re ready to buy SPOT shares? If so, here’s a little company history, the pros and cons of buying, and how you can purchase Spotify stocks.

How to Buy Spotify Stock

Investing in Spotify stock is a great opportunity in the digital music streaming industry. Spotify is a top platform with a variety of music and podcasts, plus innovative features. To buy Spotify stock, choose a brokerage, research the company's performance, and stay updated on market trends. This guide will help you make informed decisions when investing in Spotify stock. Whether you're experienced or new to investing, knowing about buying Spotify shares can improve your investment strategy.

Step 1: Pick a Brokerage

First things first, you’ll need a brokerage to facilitate the purchase. If you don’t have one yet, don’t sweat it. You’ll need to do a little research. Look out for commissions, fees, account minimums, and types of securities offered. We already did the research for you through Benzinga’s Best Online Brokerage awards. Here’s a quick look at our top picks.

Step 2: Evaluate Your Investment Budget

Of course, only invest what you can afford to lose. Think carefully about your other investments, too. You’ll have to decide based on stock price and your budget. If you don’t have enough cash to invest in real stock, you can buy fractional shares, growing your portfolio as much as you can at the time of the purchase.

Step 3: Make the Purchase

This process will differ a bit based on your brokerage. You’ll have to choose the amount of stock you’d like to buy, place your order, and make sure the purchase goes through. After that, you’ll be a proud owner of Spotify stock.

History of Spotify and Spotify Stock

Spotify was incorporated in 2006 by Daniel Ek and Martin Lorentzon in Stockholm, Sweden, aimed at providing a legal solution to music piracy. By 2011, it had expanded beyond Europe to the United States, quickly evolving into a leading global audio streaming service. As of 2024, Spotify operates under two main segments: Premium and Ad-Supported. The Premium model offers an ad-free experience with additional features, while the Ad-Supported tier provides free access funded by advertisements, catering to a broader audience.

Spotify received $100 million in funding by June 2011 and $1 billion by March 2016. In May 2016, Sponsored Playlists were introduced to allow brands to reach listeners. By June 2016, Spotify had 100 million users. Spotify Student was launched in April 2017, offering a 50% discount to university students. On April 3, 2018, Spotify went public on the NYSE. In November 2018, Spotify's EPS was -$0.44, turning positive in October 2019. However, it dipped back to -$0.68 in October 2020. By October 2021, EPS improved to -$0.48. In early 2022, Spotify faced pressure to remove Joe Rogan's podcast due to COVID misinformation. This led to other artists removing their catalogs, and many episodes with misinformation were taken down.

Spotify has revolutionized the music and podcast industry through its innovative subscription model and extensive catalog, boasting millions of tracks and an ever-growing library of podcasts. This dual approach allows it to attract diverse users, solidifying its position as a key player in digital audio. With continuous updates and features, such as personalized playlists and tailored recommendations, Spotify has reshaped how audiences consume audio content, making it a dominant force in entertainment globally.

Overall, Spotify's stock history reflects the company's position as a leader in the music streaming industry and its potential for future growth. As with any investment, it's important to conduct thorough research and consider your own financial goals and risk tolerance before investing in Spotify or any other stock.

Spotify Dividends

Spotify currently does not prioritize issuing dividends to its investors, as the company's primary mission centers on unlocking human creativity and supporting creative artists. This focus on bolstering its platform and investing in innovative solutions often means reinvesting profits back into the business rather than distributing them to shareholders.

As of October 2023, Spotify's stock performance reflects the volatility typical of tech and media sectors, with fluctuations driven by trends in user growth and content acquisition. For example, recent reports indicated a steady increase in premium subscribers, enhancing the platform's revenue potential despite the absence of dividends.

Overall, while Spotify continues to expand its footprint in the music streaming industry and foster relationships with artists, investors should note that the company is currently funneling its earnings towards growth initiatives rather than shareholder returns. This strategy underscores Spotify's commitment to its core mission and long-term sustainability in supporting creative artists.

Is Spotify a Good Investment?

Spotify is seen as a strong investment because of its goal to support artists and reach fans globally. This dedication helps build a devoted user base, leading to more subscriptions and interaction. Additionally, 24 equity analysts widely agree that Spotify is a "Strong Buy," showing high market confidence in its future success. This confidence is based on the positive outlook for Spotify in the fast-growing creative industry, where more artists are turning to digital platforms for distribution.

The rise in demand for streaming services, along with Spotify's ongoing innovation like personalized playlists and exclusive content, puts the company in a strong position to take advantage of the growing market. With artists understanding the importance of digital visibility, Spotify has a lot to gain, making it an appealing choice for investors interested in the future of music and creative content.

A Strategy for Adding Spotify to Your Portfolio

Because Spotify occupies a unique space in the entertainment industry, it straddles the line between the consumer and the artist. As concerns swirl around the brand—particularly as they relate to artist pay and social consciousness—Spotify could be under fire. However, the stock market continues on, and it is always trending upward. This is, presumably, the direction Spotify will go as it adapts to the streaming space and remains in the forefront of the social conversation.

Should You Invest in Spotify Stock?

Spotify (SPOT) stock offers various advantages as a result of its distinctive dual revenue model, encompassing Premium subscriptions and an Ad-Supported segment. This diversification enables Spotify to leverage diverse consumer preferences, fostering its expansion in the competitive audio streaming industry. Recent fluctuations in stock prices display volatility, potentially providing entry opportunities for investors seeking to take advantage of its future direction.

Analysts have a positive outlook on Spotify, highlighting its growth in user base and investments in podcasts. The increase in content enriches user engagement and boosts monetization. Despite stock price fluctuations, Spotify's solid fundamentals and continued innovations may lead to future growth. Considering SPOT in an investment portfolio could be appealing for those interested in the evolving audio streaming industry.