Cathie Wood is Giving Up on These 5 Tech Stocks

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

Number of Hedge Fund Holders: 49

Percentage Decline in the Stake: 54%

Spotify Technology S.A. (NYSE:SPOT) provides audio streaming services worldwide. In the second quarter of 2022, Cathie Wood’s hedge fund slashed its Spotify Technology S.A. (NYSE:SPOT) stake by 54%. The ARK portfolio had a $230.43 million position in the company at the end of June, down from $662.7 million in the last quarter. Cathie Wood has consistently held on to her Spotify Technology S.A. (NYSE:SPOT) stake since Q2 2018. 

Evercore ISI analyst Mark Mahaney lowered the price target on Spotify Technology S.A. (NYSE:SPOT) on July 7 to $230 from $235 and reiterated an Outperform rating on the stock as he “materially” slashed estimates across his large cap Internet coverage to factor in the high-cost inflationary backdrop, “fierce” forex headwinds, rising signs of weak consumer demand, and recession risk.

According to Insider Monkey’s data, 49 hedge funds were bullish on Spotify Technology S.A. (NYSE:SPOT) at the end of March, down from 53 funds in the prior quarter. Gabriel Plotkin’s Melvin Capital Management is a notable shareholder of the company, with 1.5 million shares worth $233.2 million. 

Here is what Diamond Hill International Fund Concentrated Fund has to say about Spotify Technology S.A. (NYSE:SPOT) in its Q1 2022 investor letter:

“Spotify’s stock sold off in Q1 despite strong fundamental results. We believe the sell-off was due to several exogenous factors, including the interest rate policy shift, public backlash over Joe Rogan content, as well as continued skepticism by some around the company’s decision to step up growth investments again, thus calling into question the business’s longer-term ability to scale. We used the period of weakness to add to our position.”