Continuing on Its Downward Slide, Spotify Stock Reaches a New Low at $120

Just how low will Spotify go?

Several weeks ago, Spotify skirted near an all-time low at $131.

Several factors, including major sell-offs in global markets, attributed to the company’s weakening share price.  The streaming music giant soon rebounded, closing at around $141 per share.

Major investment firms and banks remained unfazed about the low numbers.  Ahead of the company’s Q3 2018 report, Goldman Sachs and eleven other firms pushed investors to buy the stock.

The move appeared to work.  For the first time in its 10-year history, Spotify had posted a profit, earning $49 million.  Then, after unveiling a $1 billion stock repurchase program, the company’s shares steadily climbed once more.  Investors seemed ready to line up behind the streaming music giant.

Soon after, Spotify’s shares declined.  Despite a recovering stock market, multiple banks – including Barclays, Wells Fargo, and JPMorgan Chase – downgraded their price targets for the company.

Simply put, the banks saw what other investors have seen.  Spotify’s average revenue per user (ARPU) will continue to steadily decline.  Though the company continues expanding worldwide, total revenue and subscriber growth have slowed.

Now, the company has reached a new low.

Edging closer to $100.

Thanks to lost investor confidence in Apple and Facebook, global tech stocks – and the market as a whole – have fallen.  The Dow Jones fell over 500 points in Tuesday trading.  NASDAQ fell 2.2%.

Highlighting the tech sector’s steep fall, Apple’s falling shares led a similar tumble on Monday.  The company has slashed production orders for iPhones ahead of the busy holiday season.  According to the Wall Street Journal, Facebook has adopted an aggressive leadership style, scaring away investors.  The company’s stock fell 5.6%.  Mark Zuckerberg denied the report, stating the report caused “bad morale” among staff.

Unfortunately, Spotify wasn’t spared.

Yesterday, the company’s shares closed at $126.70.  Today, the stock opened at a historic low of $120.55.  Currently, the stock sits at $130.36.

With revenue and subscriber growth slowing, and no clear path to profitability, should we expect the company’s stock to drop below $100 before the end of the year?