Spotify share price set to trade higher, nears $50 billion market cap

Spotify has seen its share price double in value over the last three months, with the company on course to a $50 billion market cap after it looks to monetise podcasts and test in-app offers.

Since the beginning of April, where the stock was trading at $121 a share, the music streaming service has seen its share price soar more than 98%, with the company closing at $241.76 on Tuesday.

Spotify exceeds Wall Street analysts expectations

Spotify’s meteoric rise has seen it exceed Wall Street’s expectations, with the 25 analysts offering 12-month price forecasts for the company having a median target of $165.85.

The music streaming service is already trading 31% above that median share price target and is closing in on the high estimate of $245.90 and looks likely to break above even this level in 2020.

However, last week analysts at Monness Crespi and Rosenblatt Securities upped their price target for Spotify to $275 per share – implying a potential upside of 13.7%.

Spotify’s soaring share price is great news for its shareholders, but is bad news for the wider music industry, with Universal Music Group owner Vivendi down 12% year-to-date and a market cap of €27 million ($30.4 billion), while Warner Music Group is trading at $31.35 per share with a market cap of $16 billion.

Joe Rogan podcast deal worth every penny

Since announcing back in May that the comedian Joe Rogan will migrate his popular podcast ‘The Joe Rogan Experience’ to Spotify’s platform from 1 September and become exclusive to the music streaming service later this year its share price has soared.

The multi-year deal, which will see The Joe Rogan Experience disappear from all other streaming platforms is reportedly valued at $100 million (£82 million).

‘It will remain free, and it will be the exact same show,' Rogan said in a statement. ‘It's just a licensing deal, so Spotify won't have any creative control over the show.’

‘They want me to just continue doing it the way I'm doing it right now,’ he added. ‘I'm excited to have the support of the largest audio platform in the world and I hope you folks are there when we make the switch!’

Spotify tests interactive ad format for podcasts

Another bit of news that is exciting investors is Spotify’s testing of a new interactive ad format for podcasts on its platform.

Instead of listeners having to remember a promo code mentioned within the podcast itself, Spotify’s new in-app feature will display offers that consumers can simply click on to redeem.

‘The average podcast listener has heard a countless number of ads ending with promo codes or show-specific websites, carefully repeated three times so as not to forget it,’ Joel Withrow, senior product manager of Podcast Monetisation at Spotify, said in a statement.

‘In-app offers makes it vastly simpler for listeners to redeem deals whenever they come back to the app, and we can all benefit from one fewer ‘w-w-w-dot’ spelling lesson from our favourite podcast creators.’

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