Investors disappointed as Spotify has rough day

LOS ANGELES— Spotify Technology SA suffered its worst stock decline since becoming a public company, slammed by investors who weren’t impressed with a 45-per-cent jump in subscriptions last quarter.

The shares tumbled as much as 11 per cent on Thursday after the music-streaming service said it reached 75 million premium users last quarter. Though the number matched Spotify’s projections, it wasn’t the breakout growth shareholders expected after a strong debut on the New York Stock Exchange last month.

Spotify has pitched itself as the dominant player in music streaming, and chief executive officer Daniel Ek has set out to claim the largest share of a market that should one day number billions of people.

“While the fundamentals look solid and Spotify came in line with its guidance, today’s afterhours stock reaction can be viewed as an expectations correction,” said Rohit Kulkarni, an analyst at SharesPost Inc.

The company’s stock fell as low as $151.11 (U.S.), marking its biggest intraday drop. Before the rout, it had climbed 29 per cent over the past month.

“Sometimes, the market just gets stupid and just trades on its own momentum,” chief financial officer Barry McCarthy said. The Stockholm-based company reported an operating loss of 41 million euros ($49 million) last quarter on sales of 1.14 billion euros.