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Spotify shares soar after Joe Rogan podcast deal

The music streaming platform saw its share price surge on Wednesday after announcing exclusivity deal with comedian Joe Rogan’s popular podcast.

Spotify Source: Bloomberg

Spotify shares extended gains on Wednesday after the company announced that comedian Joe Rogan’s popular podcast will be available on its platform from 1 September and become exclusive to the music streaming service later this year.

The stock has climbed 15% since announcing the exclusive deal, rallying $24, with the share price trading at $183 per share at time of publication.

The multi-year deal, which will see The Joe Rogan Experience disappear from all other streaming platforms is reportedly valued at $100 million (£82 million).

‘It will remain free, and it will be the exact same show,' Rogan said in a statement. ‘It's just a licensing deal, so Spotify won't have any creative control over the show.’

‘They want me to just continue doing it the way I'm doing it right now,’ he added. ‘I'm excited to have the support of the largest audio platform in the world and I hope you folks are there when we make the switch!’

Spotify shares exceed analysts price targets

Of the 24 analysts offering 12-month price forecasts for Spotify the median target for the stock is $168.52.

But the music streaming platform has seen its shares exceed analysts’ expectations, with the stock trading 8% higher than the median price target.

Rosenblatt analyst Mark Zgutowicz said that the Joe Rogan deal ‘substantially raises Spotify’s global podcast brand’.

Zgutowicz also noted that ‘longer-term halo effects are likely more substantial including leverage with additional high profile deals, and subsequent engagement momentum, inching closer to label (podcast) leverage perhaps sooner than later’.

Spotify sees Q1 revenues soar

Overall, the music streaming platform ‘remains very healthy’ with more than €1.8 billion in liquidity, with the company delivering a strong set of first quarter (Q1) results in April.

In its first three months of trading this year, Spotify has seen its user base swell to 130 million paid subscribers, with 286 million total monthly active users.

That increase in activity helped Q1 revenues rise 22% to €1.85 billion. Of that figure, the majority of revenue came from paid subscriptions, with advertising revenues falling below the company’s guidance due to the Covid-19 crisis.

‘We know that many creators, with touring and live shows cancelled, that the pandemic has brought unthinkable levels of uncertainty into their lives,’ Spotify CEO and founder Daniel Ek said. ‘And like every other company, we are operating in a new reality, and it is, of course, premature to say when things will return to normal, or what the normal will look like.’

How much does it cost to buy US shares with IG?

There are two ways to ‘buy’ US shares with IG: trading CFDs or buying physical shares. How much it costs will depend on which method you choose. The table below illustrates how the costs to get exposure to $12,750 of Tesla stock, which is equivalent to 17 shares (quoted at $750 a share, at a GBP/USD rate of 1.305).

Remember, CFDs are derivatives, which come with higher risk and reward than investing.

CFD trading Share trading
Action Buy 17 share CFDs Buy 17 shares
Capital required to open $2550 $12,750
Total fees $24.24 $97.70

Ready to start trading shares? Open a live account or practise on a demo.

Note: The above is accurate as of 10 March 2020, and amounts do not include overnight funding charges and taxes.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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