• Sweden edition
 
Windfall on the cards for Spotify staff

Windfall on the cards for Spotify staff

Published: 12 Aug 2011 13:37 GMT+02:00
Updated: 12 Aug 2011 13:37 GMT+02:00

According to reports in Computer Sweden, in 2010 the employees were given the chance to pick up shares at a cost of 50 kronor ($7.7 )per share. Although it is unclear how many decided to invest, a total of 6.1 million was raised.

Those that did take up the offer have made a handsome profit – those shares are now worth 2,500 kronor a piece and the employees share of the company is now worth some 293 million.

It is a significant boost for the company, which has recently launched in the U.S. In less than 18 months Spotify’s valuation has tripled, to what analysts now estimate to be around 7 billion. Much of this can be attributed to an injection of capital from Russian Digital Sky Technologies and the American companies Kleiner Perkins and Accel.

However the company is still making heavy losses. The mother company, registered in Luxembourg posted losses of 293 million for 2010.

In Sweden things look more promising. In 2010 the Swedish subsidiary Spotify AB recorded sales of 165 million and made a profit of 50 million - compared with sales of 90 million and a 14 million profit the year before.

Meanwhile, Spotify Sweden AB, which takes care of ad sales, made sales of 87 million and a profit of 12 million.

TT/The Local/gm (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

10:48 August 13, 2011 by axiom
i am not a economist but how do you value a company at 7billion when it makes no profits loosing almost 300million a year. I assumed profitability influenced net worth, or I guess in this case its prob reflective of its ability to turn over profits in the long term.

shame spotify isn't making so much money though, it has changed my music listening completely, haven't bought a cd or mp3 in 3years.
11:01 August 13, 2011 by jomamas
Why not 'men start amazing company and lead the path to the future?'.

After all 3 other articles headline 'Man rapes girl' , 'Man murders child' etc. etc..

So - is it ok to identify Men when they commit a crime, but not when they do all the innovation and nation/economy building?

And why not the color and religion of the men? Is that not relevant as well?

It's so obvious that Sweden is 'anti man' this has to be some kind of joke ...
15:26 August 14, 2011 by swedejane
It's vapor wealth until those holding the pre-IPO shares can actually sell them...which won't happen until they go public. And that doesn't appear to be anytime soon. Look at Pandora: 100M users and 36M active paying members and they're break-even or slightly profitable but their stock is trading around the $12 mark. Their royalty payments are a lot less than Spotify as well. Spotify's most recent forecast was to pick up 50M users by next year (so maybe 5-6M paying subscribers)...this will still put them far behind Pandora.

Plus, I'll be dollars to donuts that Pandora issues all employees options as part of their compensation package and not trying to sell it to them, thereby effectively reducing their development/labor costs. That might work in Sweden, but in the US they won't get anybody but the most desperate/least talented developers working for them.

Finally, with the exit of one of their major music catalog providers the labels are going to start seriously re-evaluating this service and the royalty payments, which is going to put even more pressure on Spotify's business model. Not to mention the patent infringement lawsuit by Packet Video (which, I've read, and they probably won't win it but they'll bleed Spotify of even more money trying to fight it). With that said, I like Spotify and use it...despite several weaknesses it has...they should really treat the employees better and offer stock options upfront instead of doing a yearly sell based on whatever their most recent valuation is at the time. They have enough cash in the bank to not go around shaking their tin cup to their employees who are, undoubtedly, already working day and night to make it successful.
10:49 August 16, 2011 by KungsholmenGuy
swedejane agree with what you wrote except that in Sweden the tax implications are vastly better for employees if employees buy shares within a company internal share offering program rather than receiving options or receiving these shares for 'free' from the company (which is then taxed as salary at some obcene tax rate like 56% for the individual, and the company itself pays additional tax on this 'bonus' also). Options are so financially inefficient as to be essentially useless in Sweden, but not in the USA and Canada. Not sure about other countries.
Today's headlines
Late summer sun set to hit Sweden

Late summer sun set to hit Sweden

Forecasters have predicted sunshine across Sweden this week, with a warm front moving in from Russia and temperatures of up to 25C. READ  

International police hunt
Swedish killer arrested after European hunt
Photo: Police

Swedish killer arrested after European hunt

UPDATED: Police arrested a man on Tuesday afternoon after he went missing from a psychiatric ward in western Sweden at the weekend. The man had been convicted of murdering a five-year-old schoolgirl in 2003. READ  

Music
The five best Swedish songs of the month
Swedish singer Tove Lo. Photot: TT

The five best Swedish songs of the month

The summer may be (almost) over but the music will keep on playing here at The Local. Our resident music guru Paul Connolly will be selecting his top new Swedish tracks for us in a new monthly feature. READ  

Hedgehog pet craze sweeps Sweden

Hedgehog pet craze sweeps Sweden

African pygmy hedgehogs are being bought by growing numbers of Swedes, as a trend for keeping exotic pets sweeps the country, the Department for Animal Welfare and Health tells The Local. READ  

Poisonous mushrooms cause stir in Sweden
The mushroom in this picture is not the same as the one from the story. Photo: Shutterstock

Poisonous mushrooms cause stir in Sweden

A person selling freshly-picked mushrooms in Gothenburg has come under fire after it turned out the delicacies were not only poisonous but also hallucinogenic. READ  

Pirate Bay founder case starts in confusion

Pirate Bay founder case starts in confusion

The largest hacking case in Danish history began in confusion on Tuesday, after lawyers representing Swedish Pirate Bay co-founder Gottfrid Svartholm Warg accused the prosecution of "unreasonable" tactics. READ  

Swedfund joins H&M in Ethiopia expansion

Swedfund joins H&M in Ethiopia expansion

As H&M expands into Ethiopia, Sweden's state venture capital unit Swedfund has announced that it will back the clothing giant, in a move hoped to create more jobs for local women. READ  

Elections 2014
Social Democrats reveal election manifesto
Photo: TT

Social Democrats reveal election manifesto

UPDATED: Sweden's main opposition party the Social Democrats has revealed its election manifesto at a press conference at a high school in Stockholm, with a key focus on education and welfare benefits. READ  

Teen run over by train after 'shoplifting' chase

Teen run over by train after 'shoplifting' chase

A teenage boy is in a critical condition after he was hit by a passing metro train in Stockholm. The accident ground rail traffic to a halt, and has police suspecting attempted murder. READ  

Swimrun
Record win at Sweden's tough island race
Photo: Jakob Edholm/ÖTILLÖ14

Record win at Sweden's tough island race

Two Swedes crushed last year's course record at the Swimrun world championship in Stockholm's archipelago on Monday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
The five best Swedish songs of the month
Sponsored Article
Introducing… Insurance in Stockholm
National
Huge clear up underway after Skåne floods
Politics
Sweden's Alliance reveals full manifesto
Tech
Sweden's highest peak to lose title next year
Blog updates

02 September

America night (Blogweiser) »

" There was an event this weekend for the ‘Americans in Sweden’ Facebook group. I’m a member, and I brought my girls to the evening. The gathering was at a Boston-themed sportsbar in a mall. There were loads of screens, a bowling alley, a game room and a jumbotron. It was as good a place as any to..." READ »

 

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 
 
 
Politics
How immigration became a key election issue
Society
Brit's life in Sweden becomes BBC radio show
Gallery
People-watching August 27
Gallery
Top ten false friends in Swedish
National
Roma advocate scoops Wallenberg prize
Society
Meet the man who made a Swedish store recall its high heels for kids
Business & Money
'How I came to run my own business in Sweden'
Politics
Expert explains why Sweden's election oozes uncertainty
National
City plays Schindler's List theme at Nazi rally
Society
For Stockholm Fashion Week, here's the A-Z of Swedish fashion
National
'Amnesiac' man avoids deportation for ten years
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Sponsored Article
Find out what gives this Swedish school executive appeal
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

757
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se