Spotify Tumbles as Investors Adjust Tune on Margin Concerns
- Management says content spending will weigh on margins
- Fourth-quarter forecast overshadows uptick in Premium users
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Spotify Technology SA is planning to boost spending in an effort to drive the next phase of growth, but Wall Street isn’t singing along to the tune.
The Stockholm-based music streaming service tumbled the most in almost six months after management cautioned that margins were likely to be compressed by increased spending on research and development, as well as content. The company also reiterated a fourth-quarter revenue forecast that fell short of estimates and cut the high end of its projections for growth in monthly active users and premium subscribers in the quarter.