Spotify shares dive: Shares of the music-sharing company Spotify (NYSE:SPOT) have taken a dive after the company reported its first-quarter financial results for 2018 on Wednesday.
The Swedish company announced that for the first quarter Monthly Active Users only reached 170 million, with Premium Subscribers up less than half of the total at 75 million.
Total revenue for the quarter was nearly €1.14 billion, or approximately $1.37 billion USD, while operating losses made up 4% of the total revenue at €41 million, or $49 million.
Spotify has stated that foreign exchange rates also had a negative effect on the company’s revenue results.
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According to the quarterly results, Premium revenue would have been up by 36% year-over-year, rather than the recorded 25%, as a result of the foreign exchange rate.
The company expects to lose between €230 million to €330 million, or approximately $275 million to $395 million, in operating losses for 2018.
Monthly Active User numbers are expected to increase and be between 198 to 208 million, with Premium Subscribers reaching 92 to 96 million.
Although the company seemed to do fairly well, the results fell just short of several analyst predictions, according to the Globe and Mail.
In a recent article from BBC News, analyst Ali Mogharabi suggests “that part of the problem may be that [Spotify] was offering ‘too many discounts’ on music subscriptions and extending the length of free-trials” as an attempt to convince users to pay.
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After being on the market for one month, Spotify shares had fallen from its original $165.90 opening price to a value of $154.12 when the market opened on Thursday morning.
Spotify has already reached a low of $151.00.
Comparatively, Spotify closed on Wednesday at a share value of $170.00.
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