Media Tempest In A Teapot?

03/21/22 02:49:28 PM

by Matt Blackman

Joe Rogan and Spotify battle a media storm. So what's next?

Security: CFVI, SPOT
Position: N/A

It's been a tough three months for Spotify and their star podcaster Joe Rogan. Rogan, never one to shy away from controversy, got a little more of it than he bargained for attracting debate and censure like flies to 'you know what.' On one side is the government and the likes of Neil Young decrying misinformation versus Rogan and those opposing the official "vaccine for all" dogma and pushing health freedom on the other. It was just the latest in a series of escalating rhetoric in a pandemic response that continues to divide nations around the globe.

Spotify stock has really taken it on the chin since November 2021 as Figure 2 shows. The stock hit a 2021 high north of $300 in early November and then saw its stock nearly cut in half by early February 2022.

Figure 1. Daily chart of the CF Acquisition Corp SPAC (Special Purpose Acquistion Corp) showing the uptick in activity from early December 2021.

Graphic provided by: TradingView.

But Spotify has more problems than mere media perception. As of its latest financial report, the company lost $38.9 million on sales just north of $11 billion and the company has yet to report an annual net income on the positive side of zero. The company lost $3.54 per share in 2020 down from a loss of $1.15 in 2019 according to data from Macrotrends.net.

Figure 2. Daily chart of Spotify in a decided downtrend.

Graphic provided by: TradingView.

Another challenge facing SPOT is that more companies are joining the music streaming fray including Amazon Music which includes high definition music for the same price than the competition offering standard MP3 quality. And as competition has ramped up, profits are getting squeezed.

The last salvo in the media storm hit the market February 7 following a Tweet and letter from Rumble CEO Chris Pavlovski offering Rogan "100 million reasons to make the world a better place" to bring his shows over to the platform "with no censorship" and $100 million over four years.

The problem with the Rumble offer is that Rogan signed a $100 million multi-year exclusive licensing agreement with Spotify in 2020 and they are unlikely to give up their star podcaster without a fight. But they have removed more than 100 of his podcasts citing medical misinformation, racial slurs and objectionable language. Will Rogan accept this censure and if not, does he have a legal way out?

In the meantime, CFVI bears watching. If there is any indication that Rogan could make the jump, look for the stock to get even friskier on any news.

Suggested Reading:

CFVI Jumps on Rumble Joe Rogan Tweet

Spotify Income Statements

Matt Blackman

Matt Blackman is a full-time technical and financial writer and trader. He produces corporate and financial newsletters, and assists clients in getting published in the mainstream media. Matt has earned the Chartered Market Technician (CMT) designation. Follow Matt on Twitter at www.twitter.com/RatioTrade

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Media Tempest In A Teapot?

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