Spotify has announced a stock repurchase program beginning in the third quarter of 2021.
Repurchases of up to 10,000,000 of the company’s ordinary shares have been authorised by the general meeting of shareholders. The board of directors approved share repurchases up to $1 billion, which would represent 2.5% of the current market capitalisation of £39.3 billion.
"The repurchase program will be executed consistent with the company’s capital allocation strategy, which will continue to prioritise aggressive investments to grow the business," stated the announcement.
Spotify's stock valuation had hit a 14-month low prior to the announcement. Shares were up 1.7% in pre-market trading.
“This announcement demonstrates our confidence in Spotify’s business and the growth opportunities we see over the long term,” said Paul Vogel, chief financial officer at Spotify. “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.”
The authorisation to repurchase will expire on April 21, 2026.