Baron Funds Believes Spotify (SPOT) has a Huge Advertising Revenue Potential

Baron Funds, an asset management company, released its “Baron Focused Growth Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund declined 19.91% in the second quarter compared to a 19.55% fall for the Russell 2500 Growth Index. Inflation, the Ukraine war, and interest rate hikes impacted the quarterly performance of the fund. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Baron Funds discussed stocks like Spotify Technology S.A. (NYSE:SPOT) in the second quarter investor letter. Based in Luxembourg, Luxembourg, Spotify Technology S.A. (NYSE:SPOT) is an audio streaming service provider. On September 12, 2022, Spotify Technology S.A. (NYSE:SPOT) stock closed at $111.34 per share. One-month return of Spotify Technology S.A. (NYSE:SPOT) was -7.29% and its shares lost 54.33% of their value over the last 52 weeks. Spotify Technology S.A. (NYSE:SPOT) has a market capitalization of $21.451 billion.

Here is what Baron Funds specifically said about Spotify Technology S.A. (NYSE:SPOT) in its Q2 2022 investor letter:

“Spotify Technology S.A. (NYSE:SPOT) is a leading digital music service available in over 175 countries. The company offers on-demand audio streaming through paid premium subscriptions as well as through a free ad-supported model. Shares fell due to continued controversy surrounding Joe Rogan, a podcaster exclusive to Spotify’s platform, along with broader macroeconomic concerns.

We view Spotify as a long-term winner in audio streaming with potential to reach more than 1 billion monthly active users because of its scalable core music product and growing library of podcasts. Its 5 million creative artists could increase to 50 million, and we believe its advertising revenue potential is several multiples of what it currently generates.”

Photo by Alexander Shatov on Unsplash

Spotify Technology S.A. (NYSE:SPOT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held Spotify Technology S.A. (NYSE:SPOT) at the end of the second quarter which was 49 in the previous quarter.

We discussed Spotify Technology S.A. (NYSE:SPOT) in another article and shared Rowan Street Capital’s views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

Disclosure: None. This article is originally published at Insider Monkey.