Shareholders of Spotify have had quite a rollercoaster ride over the past several years, but those who stuck it out have now been sweetly rewarded.
At around USD $328.60 per share at market close on Tuesday (September 3), Spotify’s share price is up 74% since the start of 2024 and up an incredible 337% since it bottomed out in December 2022.
Yet Spotify’s current price is at heights the company has seen before – back during the Covid-19 pandemic, when companies benefitting from people staying at home (think Netflix or Peloton) went through the roof.
All the same, taking the long view, Spotify’s stock price is a good 120% above the $150 level around which it hovered for years prior to the pandemic, and at its current price, the company boasts a market cap of nearly $66 billion.
So who, exactly, owns this behemoth of tech and entertainment?
By digging through Spotify’s SEC filings, including its most recent 20-F (aka its annual report), as well as 13Gs (“statement of ownership”) and 144s (“proposed sale of securities”), MBW has been able to build a clear image of Spotify’s biggest shareholders.
Ek and Lorentzon dominate
In 2024, as in previous years, Spotify’s two founders – Daniel Ek and Martin Lorentzon – continue to dominate, not just in terms of shareholdings but in terms of voting power as well.
Per Spotify’s latest 20-F, filed in February, as of the end of 2023, CEO Daniel Ek was the largest shareholder, with 30.86 million shares, or 15.65% of Spotify’s 197.14 million outstanding shares.
At Spotify’s current share price, Ek’s shares would be worth $10.14 billion.
Lorentzon held 21.53 million shares, or 10.92% of all shares, and those shares would be valued at $7.07 billion at the current share price.
But that’s not the whole story, because on top of ordinary shares, Spotify also issues “beneficiary certificates.” These aren’t shares, and can’t be sold for cash on the market; what they are is voting rights.
There are nearly twice as many of these beneficiary certificates as there are ordinary shares (about 343.8 million of them), and each one entitles the holder to a vote. All of these shares are held by Ek and Lorentzon. This structure was designed intentionally, to ensure that the founders would in effect retain control of the company even after selling a majority stake to investors in Spotify’s 2018 IPO.
Ek holds 132.24 million of these beneficiary certificates, or 39.0% of the total, while Lorentzon holds 209.60 million, or 61.0% of the total. That’s enough to give Lorentzon a larger share than Ek of total voting rights – 42.7%, compared to Ek’s 30.5%.
In all, the two founders controlled 73.2% of Spotify’s voting rights at the end of 2023, down slightly from 74.3% the year before.
Both founders own a significant chunk of their Spotify shares through holding companies. Just less than half of Ek’s shares – about 13.42 million – are held through D.G.E. Investments, a holding company headquartered in Cyprus. D.G.E. Investments is, in turn, owned by D.G.E. Holding, also based in Cyprus, and its sole shareholder is Ek.
The vast majority of Lorentzon’s shares are owned by Rosello Company Limited, located in Cyprus, which in turn is owned by a Luxembourg-based company called Almatea, in which Lorentzon is the sole shareholder.
Notably, both Ek and Lorentzon sold some of their shares this year. According to SEC filings, Ek has sold 650,000 shares of Spotify this year, with a total market value of $176.3 million, while Lorentzon has sold around 528,600 shares, in three separate tranches, with a total market value of around $173 million.
With Spotify’s stock price where it is, Ek and Lorentzon clearly see this as a good time to cash in – though both have held on to the vast majority of their shares.
Baillie Gifford & Co
Edinburgh-based investment firm Baillie Gifford & Co is a longtime major shareholder in Spotify, holding 9.7% of the company when it went public in 2018, and gradually increasing its share until it hit 14.5% at the end of 2022.
However, it’s recently reduced its holdings, and now owns 12.0% of Spotify’s outstanding shares, or 23.66 million. That makes it the largest institutional investor in Spotify, and the second-largest overall, behind Ek, and ahead of Lorentzon.
However, given Ek and Lorentzon’s additional voting rights, Baillie Gifford holds 4.37% of Spotify voting rights.
Based on Spotify’s share price at market close on September 3, Baillie Gifford’s holdings in Spotify would be worth around $7.77 billion.
Tencent
Another notable major shareholder in Spotify is Chinese tech giant Tencent, which, as of the end of 2023, owned 16.63 million shares, or 8.4% of all outstanding shares.
Tencent owns Spotify via a number of subsidiaries and holding companies, including streaming giant Tencent Music Entertainment’s Hong Kong affiliate (TME Hong Kong), Image Frame, Tencent Mobility Ltd., and Distribution Pool Limited, all of which are ultimately owned by Tencent Holdings Limited.
Tencent’s share of Spotify was worth $5.46 billion at SPOT’s share price as of September 3, and would give Tencent 3.07% of Spotify voting rights – except, according to SEC filings, Daniel Ek actually controls Tencent’s voting rights in Spotify, via his holding company D.G.E. Investments, which “holds an irrevocable proxy with regard to [Tencent’s] ordinary shares.”
Ek, Lorentzon, Baillie Gifford and Tencent are the only shareholders to appear in Spotify’s 20-F filing to the SEC, as SEC regulations only require shareholders with 5% or more interest in a company to declare their holdings. However, there are a number of other shareholders with less than 5% of Spotify who are worth mentioning.
Morgan Stanley
A few years back, New York-based investment bank Morgan Stanley reduced its holdings in Spotify, from 12.0 million shares, or 6.3%, at the end of 2022, to 8.38 million shares, or 4.4% of all shares, at the end of 2023.
According to SEC filings, Morgan Stanley still holds this stake in Spotify, which gives the investment bank 1.54% of voting shares in Spotify and its equity holding was worth around $2.75 billion at last count.
Universal Music Group
Unlike Sony Music Group and Warner Music Group, Universal Music Group hasn’t sold off all or most of its stake in Spotify, though it was talking about doing so as far back as 2018.
According to UMG’s most recent annual report, the company holds 6.49 million shares of Spotify, the exact same amount as a year earlier, equal to 3.30% of outstanding shares.
That gives UMG about 1.2% of Spotify voting rights, and its equity stake in the company would be worth around $2.13 billion based on Spotify’s $328.60 per share price on September 3.
Notably, UMG’s stake has more than doubled in market value since Spotify’s IPO in 2018, when the UMG stake was worth around $850 million.
T. Rowe Price & Associates
New York-based investment management firm T. Rowe Price has been gradually reducing its holdings in Spotify.
At the end of 2021, it held 16.1 million shares, or 8.4% of the total; by the end of 2022, it held 9.7 million shares, or 5.0%.
According to a 13G filing with the SEC, T. Rowe Price has once again reduced its holdings, down to 6.45 million shares as of February 2024, or 3.22% of the total. It holds 1.17% of Spotify voting shares.
The firm’s stake in Spotify would be worth $2.12 billion at the company’s share price on September 3.Music Business Worldwide
