Ajit Karn
ValueAct Capital Management has invested in Spotify Technology SA at a time when the music streaming company is trying to cut costs.
“We’re glad to have ValueAct as an investor in Spotify,” a representative for the Swedish company said Friday, without giving more information about the investment.
The price of Spotify’s stock went up by 3.5% to $125. (nearly Rs. 10,300).
Bloomberg News said that ValueAct CEO Mason Morfit talked about the investment during a talk at Columbia University in New York on Friday. The stake was first reported by Bloomberg News.
ValueAct, which didn’t want to say anything, is different from other activist investors because it prefers to stay out of the public eye and rarely talks about its investment ideas.
In recent years, it has been investing more in Japan, but it has also put money into US companies like Microsoft and Citigroup.
In 2022, Spotify has put a lot of money into building up its podcast and audiobook business. Its operating costs are growing twice as fast as its revenue.
But a tough economy made it clear that Spotify needed to tighten its belt. In January, Spotify CEO Daniel Ek announced layoffs and a restructuring of the company.
In January of this year, the company said it would lay off 6% of its employees. This was in addition to the large number of layoffs in the technology sector, which was done to prepare for a possible recession.
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In a blog post announcing the job cuts, CEO Daniel Elk said, “Over the past few months, we’ve done a lot to cut costs, but it just hasn’t been enough.” About 600 jobs will be cut.
Last year, Spotify’s operating costs grew twice as fast as its revenue. This is because the audio-streaming company put a lot of money into its podcast business, which advertisers like because people listen to them more.
