Spotify's Founder and CEO Is Betting Millions That the Stock Soars
It's often a bullish signal when company executives and other insiders use their own money to buy the company's stock on the open market. Investors pay a lot of attention to this because it is a bet by company insiders who understand the company better than anyone else. They know the ins and outs of the company and its prospects better than any outside investor ever could.
That includes when an insider buys warrants from the company that require the stock to soar for them to be worth anything at all. That's exactly what Spotify (NYSE: SPOT) founder and CEO Daniel Ek did in July.
On July 1, 2019, Ek invested 14.6 million euros ($16.2 million based on current exchange rates) to buy warrants from the company that give him the right to acquire 800,000 Spotify shares at a price of $190.09 per share. The warrants expire July 1, 2022. Given that the 800,000 warrants cost Ek 14.6 million euros, each warrant cost 18.25 euros. That is equivalent to $20.71 per warrant, given one euro was equivalent to 1.135 U.S. dollars on July 1.
Source Fool.com
