This guide discusses how to buy Spotify stock in detail. It will introduce you to the best Spotify shares brokers and tell you what factors to consider when choosing a broker. We will then break down the share investing process, covering each step, in detail. You will learn how Spotify works, its financial standing, its historical stock price performance, and factors expected to influence SPOT’s share price in 2023 and beyond.
Spotify is one of the most popular brands in the music and podcasting world. It is massively popular with both artists and listeners. In less than a decade, it has evolved to become the largest audio streaming platform and media service provider in the world.
By the end of this guide, you will have learnt everything you need to know about Spotify and its share price. You will also have decided whether SPOT shares are worth buying in 2023.
Your capital is at risk. Other fees apply.
Below, we explore this share investing process and cover each step in detail. We start by helping you decide where to buy Spotify stock in 2023.
The Spotify (SPOT) Stock Buying Guide - Reviewed
Step 1: Decide Where To Buy Spotify (SPOT) Stock
Spotify is a popular stock and a significant component of multiple indices and ETFs. This has helped it list with some of the most popular stock trading platforms – complicating your choice of where to buy Spotify shares.
But to help with your search for the best Spotify stock broker, our analysts have identified a few factors that you ought to look out for when searching for the best SPOT broker. Here are a few:
- Pricing: Compare the pricing model of different brokers and register a share investor account with the most affordable brokerage. Check the fees, commissions and other charges (both trading and non-trading) and assess their impact on the profitability of your SPOT stock trades.
- Regulation and reputation: You will also want to only register with a regulated broker of impeccable reputation. Check online reviews and confirm their customer service, reliability, and efficiency.
- Account minimums: Some brokers support fractional share ownership. Others have higher deposit minimums for such payment methods as banks. Compare trading and deposit minimums set by different brokers and register with the most affordable.
- Security: Confirm the security measures placed around your personal data and funds by your preferred broker. Ideally, the broker should insure your deposits with the likes of FDIC and FSCS, maintain a segregated bank account for client deposits, and enforce strict controls over the access and sharing of sensitive client information.
- Trading platform: The ideal broker should maintain a highly navigable and easy-to-use trading interface. It should also integrate sufficient trading, educational, analysis, research, and risk management tools and resources.
Our analysts have analyzed tens of highly reputable stock trading platforms, so you don’t have to. And they settled on the following two as the best places to buy Spotify shares in 2023.
eToro – Best Spotify Stock Broker for User Friendliness and Social/Copy trading
eToro is one of the most popular online trading platforms – catering to 25+ million investors across the world. It is multi-regulated, highly reputable, and supports 5000+ trading instruments. In addition to buying Spotify shares on eToro, you can also trade 3000+ local and foreign shares, ETFs, commodities, indices, forex, and crypto. The broker also maintains one of the friendliest onboarding processes and trading interfaces.
This trading platform is also highly innovative and integrates a broad range of tools and resources that make it appealing to both beginner and expert traders. These include such educational resources as how-to guides, webinars, and a free demo account. They then stretch to premium analysis and trading tools like customizable charts as well as risk-management tools like stop loss and negative balance protection.
To start buying Spotify shares on eToro, you only need to deposit at least $10. This can be made via such supported payment methods as bank cards, bank wire transfers, and eWallets like PayPal.
Deposits are free, but withdrawals are charged a $5 fixed processing fee - with the minimum withdrawal amount being $30. The brokerage is also competitively priced as it doesn’t charge a trading commission. You will only pay a variable spread when buying SPOT stock on the platform.
We believe eToro to be the best Spotify shares broker because of its social and copy trading features. Social trading allows for seamless interactions between all of eToro platform users. Copy trading, on the other hand, allows every eToro platform user to earn passively.
PRO investors receive a reward from eToro when they let others copy their trade settings. Everyone else can make money by automatically mirroring the trade settings of highly successful investors. Note, however, that you need a minimum balance of $200 – to start copy-trading on eToro.
Your capital is at risk. Other fees apply.
Capital.com – Best CFD Brokerage for Active Traders
Capital.com is a massively popular multi-asset online trading platform, especially among CFD traders - primarily because it is a pure-CFD brokerage. These traders are also drawn by key Capital.com features, including support for a broad range of instruments – from shares, indices, commodities, currencies, ETFs, and crypto. They may also appreciate the fact the broker maintains a straightforward onboarding process or its multi-regulation and solid reputation status.
But Capital.com makes it to our list of the best Spotify shares brokers primarily because of its innovativeness. This is evidenced by the fact that it was among the first brokerages to integrate artificial intelligence (AI) into its trading platforms. It has integrated a wide range of advanced trading, research and educational tools and resources into its platform – including 70+ analytical tools.
Equally important, Capital.com is a multi-platform brokerage. This implies that in addition to its proprietary web and app trading platforms, it supports such third-party platforms as Trading View and MT4. These present traders with more premium trading tools, and some, like the MT4, allow for auto-trading and mirror-trading.
Other features that make Capital.com the best place to buy Spotify stock include its affordability, stellar customer service, and access to leverage. For starters, Capital.com is a commission-free broker. You, therefore, will only pay a competitive and variable spread (plus a swap fee for leveraged trades) when buying Spotify shares here.
Note that leverage for Spotify shares CFDs is capped at 1:5 in most jurisdictions. Capital.com also runs one of the most accessible customer support teams – available via phone, live chat, email, WhatsApp, Facebook Messenger and Telegram.
Step 2: Research Spotify (SPOT) Stock
You now know where to buy Spotify shares, but before kicking off the buying process, familiarize yourself with the music company. Learn how it operates, how it makes money, its current financial standing, and examine past price action for Spotify shares. Check if there are external forces influencing the performance of both the music company and its stock price.
This helps you determine factors that have affected SPOT’s share price in the past. But more importantly, identify factors that will have the most influence on Spotify’s share price in future. Pay keen attention to these as they will influence your buy, hold, and sell decisions.
Here is everything you need to know about Spotify and its stock.
What is Spotify?
Spotify is an audio streaming and media services company headquartered in Stockholm, Sweden. It was founded by Daniel Ek and Martin Lorentzon in April 2006 and has gone on to become one of the largest music streaming platforms in the world. It specializes in streaming digital and copyright-protected music supplied by individual artists, record labels and media companies, as well as hosting podcasts.
By the end of 2022, Spotify had more than 82 million songs listed on the platform. It is also home to more than 4.7 million podcast titles. These have helped the media company attract 479 million listeners – more than 202 million of which are paying subscribers. The company has also stretched its reach to 108 countries and territories across the world.
Spotify also has a contributor base of 11+ million artists and creators. These add an average of 1.8 million songs every month.
Spotify’s growth in virtually every niche – save for market share – has been on a sustained uptrend since its launch. For example, between 2015 and 2022, Spotify grew its total number of listeners from 91 million to 479 million (526% growth). Its fee-paying subscriber base also grew from 28 million to 202 million (721% growth) during the same period.
The number of artists and creators, the company’s popularity and reach, as well as the number of songs and podcasts on the platform have also been on the rise. Interestingly, though, Spotify has lost more than 10% of the global market share of the audio streaming and media services industry – declining from 41% in 2015 to 31% in 2022 – during the same period.
Spotify is home to some of the most popular podcasts in the world. The top five are the Joe Rogan Experience (exclusive), Call Her Daddy, Anything Goes with Emma Chamberlain, Caso 63, and Crime Junkie.
Spotify makes money in two primary ways – subscription fees and advertisements on its freemium user plan. Subscriptions account for 91% of the company’s total revenue, while paid advertisements bring in the other 9%.
The media streaming company has three subscription plans that attract different rates – based on your country of residence. These include the basic freemium plan (also known as the ad-supported plan), individual plan, and family version. In the US - the paid plan for individuals costs $9.99 ($4.99 for students), while the family plan (hosting six accounts) costs $14.99.
Like its user numbers and listenership, Spotify’s income has appreciated steadily in the last decade. In 2009, for example, Spotify’s revenue stood at €13.4 Million and only shot past €100 million in 2011. It tore above €1 Billion three years later before breaking above €5 Billion after the company went public in 2018. In 2021, Spotify’s annual revenue stood at €9.67 Billion, and in the first three quarters of 2022, the company revenue stood at €8.20 Billion.
Note that Spotify only keeps 30% of this and distributes the rest to artists and content creators on the platform. In 2021, Spotify paid out over €6.57 Billion to contributors on the platform. Of this, €3.75 went to record labels, slightly over 1000 artists/creators received over €1 Million, and about 50000 others earned more than €50,000. The company doesn’t have a fixed per-play royalty fee for artists, but the per-play rate averages between €0.0056 and €0.003.
Note, however, that even with the explosive growth in user numbers and annual revenues, Spotify is yet to become profitable. It has consistently reported an annual net loss, with the loss for the 12 months leading to September 2022 standing at €185 Million.
Spotify Historical Price Performance
Spotify went public in April 2018 and had a reference price of €123. But massive interest in the media streaming company stock sent its price skyrocketing - with the first SPOT share selling for €155. By the end of the day, however, the rush to acquire Spotify had eased. It closed at a market price of €149, and this gave the company a market valuation of €28 Billion.
The company’s stock price has, however, been exceedingly disappointing as it has consistently traded below its IPO price. At the time of writing, for instance, SPOT stock is selling more than 45% below the IPO price and as much as 80% below the all-time high of €342 hit on 19th February 2021.
The stock started with a rally past €180 in the few months following the IPO listing. By December that year, however, the rally had dissipated, and SPOT stock price dipped below €100 – for the first time. It traded between €100 and €150 throughout 2019 and in the first quarter of 2020. Like most other lockdown and other Covid-19 restriction-friendly stocks, Spotify started rallying in the second quarter of 2020. It peaked close to a year later, in February 2021, when it set the current all-time high of €342.
Since then, Spotify’s stock price has assumed an overall down-trending price action that has had it shed as much as 80% of this peak price by January 2023.
Factors Affecting Spotify Share Price
The chart for Spotify’s share price paints a picture of a highly volatile financial instrument. This could be an indicator of the many factors influencing Spotify’s share price. In this section, we outline a few of the factors that we believe will have the most impact on SPOT’s stock price in 2023 and beyond:
- Spotify’s net income: You would be right to associate Spotify stock’s beggarly performance with the company’s poor profit run. To understand the impact a profitable Spotify would have on its stock price, you only have to look at the share price action immediately after every profitable quarter. On 28th October 2019, for example, SPOT’s stock price rallied by more than 18% (in a single day) after news of a surprise profitable Q3 2019.
- Spotify’s subscriber numbers: Spotify’s stock price will also rally if rising subscriber numbers – both fermium and subscriber – result in significant revenue growth. This became clear on 27th October 2021 when SPOT’s share price rallied 8%+ (in a day) on the news that user growth had translated to a 30% increase in ad revenue.
- Industry trends: Spotify’s poor share price action in 2022 in the backdrop of roaring user growth could be attributed to plummeting tech industry stocks. If the expected global recession strikes and the market crashes in 2023, you may expect SPOT stock price to tank further.
- Key company decisions: Critical business decisions – like a sudden hike or discount of subscription fees – will also have a significant influence on the share price. On 26th September 2022, for example, Spotify’s stock price crashed 10% after the company announced plans to hike subscription fees.
Your capital is at risk. Other fees apply.
Step 3: Open a Share Investor Account and Buy Spotify (SPOT) Stock
Do you want to start buying Spotify shares right now? Use this beginner’s guide to buying your first Spotify stock on the all-popular eToro online brokerage.
1. Open a stock broker account
From your browser, access the official eToro website or download the eToro mobile trader app on your phone’s app store. Tap the ‘Join Now’ icon on either platform and complete the user registration form that pops up.
It will seek to capture such basic information as your name and phone number, email address and country of residence, trading experience and income source. You will also need to choose a unique username for the account and create a strong password.
2. Verify your identity
eToro is a multi-regulated broker licensed by the likes of FCA in the UK, SEC in the US, CySEC in Europe, and AISC in Australia. All these bodies mandate it to subject all its clients to KYC and AML checks.
The broker will, therefore, require you to verify your identity by submitting a copy of your government-issued identity document – such as a passport or driver’s license.
3. Deposit funds
After eToro sends an email notifying you of account approval, log in to that account and press the “Deposit funds” icon on the user dashboard. From the funding tab that pops up, choose one payment method and follow the prompts to fund your account with at least $10.
4. Buy Spotify stock
Once the cash reflects in your trader account, hit the “Discover” icon on the user dashboard to see the supported assets on eToro. Choose “Stocks” and use the search button to look for Spotify.
Click on the “BUY” option against SPOT stock and use the trading menu that pops up to customize this investment. Indicate the number of Spotify shares you wish to buy or how much you wish to invest in the music company.
Hit the “Open Trade” button to execute this investment.
Your capital is at risk. Other fees apply.
Spotify (SPOT) Stock Strengths And Weaknesses
But are Spotify shares worth buying in 2023? You must answer this question before hitting the buy option against SPOT stock on any brokerage. And to arrive at this answer, you need to compare the merits and demerits of buying Spotify shares in 2023.
To help you get started, we discuss some of the reasons why you may consider investing in Spotify in 2023 and others that make today not the best time to buy SPOT shares below.
Reasons to Buy Spotify Stock in 2023
- Undervalued: At close to 50% below its IPO price and 80% below its all-time high – against the backdrop of rising annual revenues and user numbers – Spotify is grossly undervalued. This, then, implies that today may be the best time to pick a market leader at a throwaway price.
- Market recovery: Two key factors contributed to Spotify’s performance throughout 2022, i.e. an extended bear market and plummeting tech industry stocks. Both are expected to eventually correct, effectively setting Spotify on the path to recovery.
- On the path to profitability: Spotify management estimates that a base of 1 billion monthly active users would push its revenues up by 20% and set it on a path to consistent profitability. With more than 456 million users already booked by the end of 2022 and year-on-year monthly active user growth of 20%, Spotify can be said to be well on its path to profitability.
- Business expansion: You may also want to invest in Spotify because it is continuously expanding its operation and income base. It, for instance, recently introduced live streaming for podcasts and will be launching audiobooks soon. These are expected to draw in more users, growing its revenue (either subscriber or ads) and hastening its path to 1 billion active users.
Reasons to Buy Spotify Stock
- Looming market crash: Today may not be the best time to buy Spotify stock, especially for short-term traders. The expected global economic recession will most likely crash the stock market and SPOT stock price with it.
- Growing competition: Spotify will most likely take longer to hit its lofty profitability projections (1 billion MAUs) if it continues losing its market share to the competition. You will especially want to wait and see how Spotify users react to the proposed hike in subscription fees.
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Your capital is at risk. Other fees apply.
Conclusion - How To Buy Spotify Stock
Spotify is a massively popular brand and a market leader in the audio streaming industry. But a combination of factors has caused serious underperformance of its stock price. These include a poor run on net income, an extended bear market, declining market share, and plummeting tech industry stocks. Heading into 2023, investors are confident that a possibly recovering market, user growth, and introduction of more services, as well as the proposed fee hike, will set SPOT stock on a path to recovery.
Want to buy the media services company stock right away? Use the step-by-step guide to buying your first Spotify stock that we have discussed above.
eToro – Buy Spotify Stock Today
Your capital is at risk. Other fees apply.
FAQs About How To Buy Spotify Stock
How can I buy Spotify stock today?
Start by identifying a regulated and reputable stock brokerage that lists Spotify shares and creates a share investor account with them. Fund this account and place a buy order for the audio streaming company stock.
What will Spotify be worth in December 2023?
Given the ever-increasing number of factors affecting Spotify stock price, no one can tell with utmost accuracy what Spotify will be worth at the end of the year. You may, however, want to watch out for such factors as the looming recession and subscriber fee hike, as they will have a significant influence on the direction of SPOT’s stock price.
Is Spotify worth buying in 2023?
The majority of analysts and stock price forecasters have adopted the watch-and-wait approach on Spotify stock. We recommend that you also wait and monitor the impact significant market developments like the performance of tech industry stocks, proposed subscriber fee hike, competition, and looming market recession will have on SPOT’s share price before investing in the company – especially if you are a short-to-medium term investor.
How much do I need to start investing in Spotify today?
In most cases, you get to decide how much you want to invest in Spotify or any other stock. However, the minimum investment amount will most likely be determined by the minimum initial deposit and trading amount limits set by your preferred broker.