Spotify Technology S.A. (SPOT) offers an audio-streaming subscription service. The company monetizes its service through monthly fees for its premium subscription service and through sales of advertising associated with its free streaming service. Spofity offered services globally in 92 countries and territories, and had 320 million monthly active users (MAUs) and 144 million Premium Subscribers as of September 30, 2020.
Headquartered in Sweden and legally domiciled in Luxembourg, Spotify is a foreign company and is thus not required to disclose the same information as U.S. firms concerning the share ownership of corporate insiders. Due to lack of information on individual insider shareholders, the top six shareholders we look at in this story are all listed as institutional investors.
"Insider" refers to people in senior management positions and members of the board of directors, as well as people or entities that own more than 10% of the company's stock. In this context, it has nothing to do with insider trading.
The top institutional shareholders of Spotify are Daniel G. Ek, Sven Hans Martin Lorentzon, Baillie Gifford & Co., Morgan Stanley (MS), Tencent Holdings Ltd. (TCEHY), and T. Rowe Price Associates Inc.
Spotify has a 12-month trailing net loss of $740.5 million and revenue of $8.5 billion. The company's market cap is about $60.6 billion. These financial data are as of January 5, 2021.
Top 6 Institutional Shareholders
Institutional investors hold the majority of Spotify's shares at about 55-57% of total shares outstanding. Each of these shareholders is considered an institutional investor even though the first two are names of individuals. The term "institutional" does not necessarily refer to a financial institution. It is used in this context to designate an investor with significant holdings of a security and who must therefore file specific documents with the Securities and Exchange Commission (SEC). Investment managers with at least $100 million in assets under management (AUM) must file a 13F form each quarter. An individual or group that acquires more than 5% of a company's shares must file within 10 days of the transaction a 13D form, or in certain cases the simpler 13G form. Any investor filing one of these forms is considered an institutional investor.
Daniel G. Ek
Daniel Ek owns 34.5 million shares of Spotify, representing 18.2% of total shares outstanding, according to his 13G filing for the period ending December 31, 2019. Mr. Ek is the co-founder and chief executive officer (CEO) of Spotify. He founded the company in 2006 with his business partner, Martin Lorentzon. Spotify has since grown into a leading music-streaming service. Mr. Ek oversaw the company's initial public offering (IPO) in 2018. Before Spotify, he founded an online marketing firm called Advertigo, which he sold to Sweden-based TradeDoubler AB in 2006. Mr. Ek has a net worth of $4.9 billion.
Sven Hans Martin Lorentzon
Martin Lorentzon owns 22.4 million shares of Spotify, representing 11.8% of total shares outstanding, according to his 13G filing for the period ending December 31, 2019. Mr. Lorentzon is the other co-founder of Spotify and currently serves as the company's vice chairman. He is responsible for designing and implementing strategies, budgets, and goals. From 2008 to 2016, Mr. Lorentzon served as the company's chairman of the board. In 1999, he founded TradeDoubler, the company to which Mr. Ek sold Advertigo in 2006. Mr. Lorentzon also served on the board of directors of Telia Company AB, Sweden's primary telecom operator, between 2013 and 2018. He has a net worth of $7 billion.
Baillie Gifford & Co.
Baillie Gifford owns 21.4 million shares of Spotify, representing 11.3% of total shares outstanding, according to the company's 13F filing for the period ending September 30, 2020. Baillie Gifford is an investment management firm with more than $370 billion in AUM across a range of asset classes. The company manages a diverse set of mutual funds. The Baillie Gifford International Growth Fund is one of its largest funds. Spotify is among the fund's top 10 holdings, comprising about 3.2% of the fund's total assets.
Morgan Stanley owns 17.9 million shares of Spotify, representing 9.5% of total shares outstanding, according to the company's 13F filing for the period ending September 30, 2020. Morgan Stanley is a multinational investment bank and financial services company with about $715 billion in AUM. The firm offers a diverse range of mutual funds. One of the firm's large equity mutual funds is its Growth Portfolio (MSEQX) fund with more than $17 billion in assets. Spotify is among MSEQX's top 10 holdings and comprises about 4.6% of the fund's total net assets.
Tencent Holdings Ltd.
Tencent Holdings owns 16.6 million shares of Spotify, representing 8.8% of total shares outstanding, according to the company's 13G filing for the period ending December 31, 2019. Tencent is a China-based multinational technology holding company whose subsidiaries provide social networking, e-commerce, mobile games, Internet services, payment systems, entertainment, and more. The company also maintains a portfolio of equity securities. Spotify is among one of its top 10 holdings.
T. Rowe Price Associates Inc.
T. Rowe Price Associates owns 13.4 million shares of Spotify, representing 7.1% of total shares outstanding, according to the company's 13F filing for the period ending September 30, 2020. T. Rowe Price Associates is a subsidiary of T. Rowe Price Group Inc. (TROW), which is a global investment management firm with about $1.3 trillion in AUM. The firm offers both exchange-traded funds (ETFs) and mutual funds. Its largest ETF, the T. Rowe Price Blue Chip Growth ETF (TCHP), has $66.8 million in AUM. Spotify comprises about 0.6% of the fund's total assets.