Spotify Technology, Inc.
SPOT
pitch
short
Mike Allison ’19, Eric Herzfeld ’19, and Michael Wooten ’19
Thesis
The pitch highlights concerns over Spotify's profitability and competitive position in the streaming market, suggesting that its current valuation is not justified given its financial metrics.
Did it work?
worked
confidence: high
The thesis was to short Spotify based on concerns over its profitability and competitive position, and the stock has declined significantly by 234.1% since the pitch. Given that 100 months have elapsed, which is well beyond a typical investment horizon, the thesis dynamics have played out as expected, confirming the concerns raised. The substantial drop in price indicates that the valuation was indeed not justified.
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