5 Best Investments of Billionaire Peter Thiel

4. Spotify Technology S.A. (NYSE: SPOT)

Number of Hedge Fund Holders: 46    

Spotify Technology S.A. (NYSE: SPOT) owns and operates one of the most popular audio streaming platforms in the world. Thiel invested in the company early on through his venture capital firm, Founders Fund. Spotify has a market capitalization of over $46 billion and more than $9.6 billion in revenue last year. It debuted on the stock market in 2018 and was valued at close to $30 billion on the first day of trading. It is ranked fourth on our list of 10 best investments of billionaire Peter Thiel.

Spotify Technology S.A. (NYSE: SPOT) stock has offered investors returns exceeding 9.7% in the past year. The company recently announced that it was launching a new live-audio chat feature called Greenroom to rival the dominance of Clubhouse in the space. 

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in Spotify Technology S.A. (NYSE: SPOT) with 3.1 shares worth more than $852 million. 

In its Q4 2020 investor letter, Guardian Fund, an asset management firm, highlighted a few stocks and Spotify Technology S.A. (NYSE: SPOT) was one of them. Here is what the fund said:

“At the current share price, Spotify basically only represents a fraction of the value they will be able to unlock in the growing market of audio entertainment. The key for Spotify is to change a variable cost base into a fixed cost base just like Netflix has. As the market share of the big labels, measured by the daily hours of engagement of the big labels, is declining, Spotify will be able to adjust its business model and create enormous operational leverage meaning that profitability will grow faster than expenses.

The music catalogue is not the business model. The value lies in the machine learning that drives discovery and engagement, the original content from people like Michelle Obama, Kim Kardashian, and Joe Rogan, the data analytics and distribution for artists, the direct and social relations artists can have with fans through music and videos. We believe that Spotify will be worth at least five times more in 2030.”