What it means when Spotify Founders and Executives sell stock

When Spotify founder and executives sell stock worth $1.6 billion is it a bad sign of what’s ahead? Have we reached peak streaming?

What it means when Spotify Founders and Executives sell stock

by Bobby Owsinski via Music 3.0

For the past year or so there seems to be a frequent news story about a Spotify executive or investor selling off their stock for a load of money. Just a week ago founder and CEO Daniel Ek sold almost $30 million worth of stock (more on this later), and early investor TCV sold 300,000 shares for around $189 million. People are getting rich, but it isn’t the artists and songwriters who actually power the platform! The question is, what does the stock selloff mean? Let me give you some ideas.

The two divestments mentioned above were not the only ones. Since 2023 Ek has been selling his stock at a steady clip, cashing out to the tune of over $800 million! His fellow co-founder Martin Lorentzon has also reduced his holdings, selling $556.8 million in Spotify stock last year through his holding company Rosello Co. Ltd. According to Music Business News, the two co-founders have liquidated approximately $1.37 billion in shares since mid-2023.

And it doesn’t stop there. Gustav Söderström, Chief Product and Technology Officer, has also sold shares worth $91.1 million, and Alex Norström, Chief Business Officer, sold $62.98 million worth of shares. 4 other funds by TCV recently sold off around 100,000 shares for another $66 million. Add it all up and 17 Spotify executives have cashed out for more almost $1.6 billion!

Even worse, they’re still not finished making money, as they still have more stock to sell.

If you’re an artist or songwriter with your work being distributed on Spotify where you make $30 for a million plays, doesn’t that make you angry?

Legit Reasons

It seems like everyone at Spotify is in a hurry to sell their stock, and there may be a good reason why, but that also leads to a little speculation on my part.

First of all, when an executive or investor is awarded stock options, there may be a date where they must execute the options or lose them, so that’s a legitimate reason to sell. They may also be automatically exercised when the stock reaches a certain price. This price is usually discounted, so that the owner can then sell the stock at a profit. 

Whatever the reason, it doesn’t give you much confidence in the company when you have a mass selloff like this.

But Maybe Red Flags

I think a lot of the stock sales (and it’s only my speculation) comes from the fact that the insiders see the real long term picture of streaming, which leads directly to the company’s financial performance.

It’s true that the company made money in the first quarter of 2025, but it actually missed the target number that the analysts predicted. A big reason is that Spotify raised its prices, which gave it a revenue boost, but you can’t expect that the happen again at least until next year.

Another red flag is that Spotify gained more users, but that pretty much offset the loss of users from the quarter before. Spotify, like all music streamers, is hitting a plateau in terms of monthly users. The market is saturated, and now the only way to grow is to steal customers from another platform.

That won’t be easy, since each streaming platform has exactly the same product.

Think about it. All platforms have the same songs from the same labels and indies. Even podcasts, which is supposed to be a big money-maker for Spotify, are the same except for a few exclusives like Joe Rogan.

What’s worse, there’s now a groundswell of artists that are removing their songs from the platform for a variety of reasons. This is a tiny movement at the moment, but artists and songwriters are starting to become aware of exactly who’s making money, and they know it’s not them.

Of course, the economy plays into to it as well, as many users who currently pay for Spotify may decide that the free version is sufficient if their purchasing ability declines.

I believe that Spotify investors and executives see the writing on the wall, and think that the stock may never go higher than it is now.

I love to see entrepreneurs do well and make money from their hard work. You must provide value to your vendors (artists and songwriters), however, and the company now treats them with contempt. Will you continue to take it?

Bobby Owsinski is a producer/engineer, author, blogger, podcaster, and coach. He has authored 24 books on music production, music, the music business, music AI, and social media.