2 Questions Spotify Bulls Have to Ask
Spotify (NYSE: SPOT) shares have soared following a string of podcasting deals. But not everyone's as sold on the streaming specialist's strategy as the rest of the market.
Bernstein analyst Todd Juenger downgraded Spotify's stock recently, believing the run-up in price isn't fully justified by its podcast investments. "We continue to believe it's unlikely Spotify will generate much earnings from podcasts," he wrote in a note.
He admitted that he and his team previously underappreciated the impact of podcast listening on music listening and subscribers, but proposes two main impediments to the podcast strategy's earnings potential. The first is Spotify's big exclusive podcast deals are only relevant in the U.S. Second, competitors like Apple (NASDAQ: AAPL) won't sit idly by if the podcast strategy proves successful.
Source Fool.com
