In a move aimed at boosting its falling stock price, Spotify announced it would buy back up to USD 1.0 billion worth of stock — up to 10 million in ordinary shares. The repurchase program was authorized by the company’s general meeting of shareholders and approved by the Board of Directors. The company would commence a stock repurchase programme beginning in the third quarter of 2021.
In a regulatory filing, the company said on Friday: "Repurchases of up to 10,000,000 of the Company's ordinary shares have been authorised by the Company's general meeting of shareholders, and the Board of Directors approved such repurchases up to the amount of USD1.0 billion. The authorisation to repurchase will expire on April 21, 2026,"
"The repurchase programme will be executed consistent with the Company's capital allocation strategy, which will continue to prioritize aggressive investments to grow the business," the company added.
The decision to buy back stock comes at a time when Spotify is reporting modest growth for its streaming business but is struggling in public markets as investors have become skeptical as to whether or not the company will be able to sustain that growth long-term and become profitable.