Investors Reassured by Spotify's Buyback After Dull Earnings
- CFO McCarthy hinted at the repurchase program in July call
- Spotify cites ‘options’ for capital despite 3Q operating loss
Photographer: David Paul Morris/Bloomberg
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Spotify Technology SA’s move to repurchase shares helped reverse earlier losses Monday, as investors search for new catalysts given last week’s dull earnings report.
The announced buyback of as much as $1 billion of the Swedish company’s stock came as a surprise, Raymond James analyst Justin Patterson admits in a note to clients, as "such an action is typically more common among mature companies." The act is management’s way of signaling confidence in the wake of recent share price performance and investor frustration over third-quarter results, he said.