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Spotify announces another share buy-back scheme

By | Published on Monday 23 August 2021


Spotify announced another share buy-back programme on Friday, which could see the streaming firm spending $1 billion to buy back anything up to 10 million of its own shares.

Although, this share buying programme is authorised by the company’s general meeting and board through to April 2026, so there’s no major rush to get those shares bought up and, I quote, “the timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities”.

A very similar scheme was announced by Spotify back in November 2018, seven months after the streaming business was first listed on the New York Stock Exchange. Among other things, buy-back programmes of this kind help boost a company’s share price, by reducing the total number of shares in circulation. And that’s something many remaining shareholders obviously appreciate.

Confirming the latest buy-back programme, Spotify’s CFO Paul Vogel said on Friday: “This announcement demonstrates our confidence in Spotify’s business and the growth opportunities we see over the long term. We believe this is an attractive use of capital, and based on the strength of our balance sheet, we continue to see ample opportunity to invest and grow our business”.

Spotify’s share price spiked earlier this year to $364.59, but has since been slipping back down to summer 2020 levels. Although confirmation of the new buy-back scheme resulted in a modest uplift on Friday, to $216.64 per share.

But will CMU be selling back its single solitary Spotify share as part of this scheme? Well, it’s currently propping up a wobbly table, so, probably not. Unless there’s another $350+ spike. Though, it’s unlikely Spotify will be doing any buy-back nonsense if that happens.