Reshaping its leadership structure for the first time in nearly two decades, Spotify Technology S.A. (NYSE:SPOT) said founder and CEO Daniel Ek will transition to executive chairman next year, while co-presidents Gustav Söderström and Alex Norström will assume co-CEO roles on Jan. 1.
Rosenblatt Securities analyst Barton Crockett called the move “minimally disruptive.” Ek has ongoing influence through dual-class shares and voting control with co-founder Martin Lorentzon.
The change signals continuity, as both Söderström and Norström have been key members of Spotify’s leadership team for over a decade. They will likely continue to work closely with Ek, Crockett says.
He also reaffirmed Rosenblatt’s Neutral rating on Spotify and kept his price forecast unchanged at $679, indicating confidence that the leadership shuffle does not alter the firm’s financial outlook.
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Ek’s new role would follow a more active European-style executive chairman model, allowing him to focus on long-term strategy, capital allocation, and regulatory engagement — what he described as “the calls that will shape the next decade.” Day-to-day operations will shift fully to the incoming co-CEOs.
Crockett noted the transition comes as Spotify posts a series of operational wins, including renewed label deals, the rollout of high-fidelity audio, expansion into video and audiobooks, a pullback in podcasts, and the implementation of AI safeguards for music content. Together with the appointment of a new CFO, these developments suggest a stable backdrop for the leadership change.
Investor communication could face challenges once Ek steps back from leading earnings calls, the analyst warns.
Competition from Apple, Amazon, and TikTok presents risks, Crockett added, citing potential margin pressure tied to future music licensing negotiations.
Upside potential hinges on subscriber growth outpacing forecasts. Additionally, the average revenue per user is expected to rise, along with AI-driven efficiencies, thereby bolstering margins beyond expectations.
Price Action: SPOT shares are trading 1.92% higher at $711.55 at the last check on Wednesday.
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