Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, December 21st.
Spotify Technology (SPOT)
The Twenty-Sixth and final pick of the Let’s Be Millionaires investment series goes to Spotify Technology.
Spotify is definitely not an unheard of small-cap company, however, with the amount of competition in the music streaming space it is still a riskier investment.
Spotify is a music streaming platform that allows its users to purchase a monthly subscription that allows them to listen to millions of songs and playlists ad-free. The platform contains almost every song imaginable as well as curated playlists for every occasion. Users can also create and share their own playlists.
About The Stock
SPOT stock went public back in April and began trading just around $140 a share. The stock then proceeded to rally up to a high of nearly $200 a share in late August. Since August the stock has been in a downtrend, falling all the nearly 40% from its highs. SPOT stock currently trades for below $120 a share
Spotify is still focused on growth and capturing market share and has negative earnings at this time making its P/E ratio irrelevant. The current market cap is around 21 Billion.
This stock could be categorized as a international, tech, large-cap growth stock.
While the music streaming industry is only getting more competitive I think that Spotify has a great chance at coming out on top. Spotify already has a massive user base but they also have one huge advantage: it is social.
I think that over the next decade competitors will fail to overtake Spotify because of the social nature of the app. Being able to easily create and share custom playlists brings me back to burning CDs for friends.
Now that the stock has fallen far from its highs I think this is a good entry point. I am excited to see how this last pick pans out over the next years.
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