Lakehouse Global Growth Fund Sold Its Stake in Spotify (SPOT)

Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” annual investor letter. A copy of the letter can be downloaded here. The year was strong for the fund despite volatility, backed by the new US administration. The fund returned 33.4% net of fees and expenses compared to 18.4% for its benchmark. Since its inception in December 2017, the Fund has returned 254.4% compared to 139.9% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Lakehouse Global Growth Fund highlighted stocks such as Spotify Technology S.A. (NYSE:SPOT). Headquartered in Luxembourg City, Luxembourg, Spotify Technology S.A. (NYSE:SPOT) offers audio streaming subscription services. The one-month return of Spotify Technology S.A. (NYSE:SPOT) was 5.08%, and its shares gained 94.43% of their value over the last 52 weeks. On September 26, 2025, Spotify Technology S.A. (NYSE:SPOT) stock closed at $716.53 per share, with a market capitalization of $147.446 billion.

Lakehouse Global Growth Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its second quarter 2025 investor letter:

“Finally, in third place was Spotify Technology S.A. (NYSE:SPOT), the world’s leading audio streaming platform. It’s a company we’ve long admired for its product leadership, and more recently, for demonstrating an ability to convert that product leadership into solid economics for shareholders. In 2024, Spotify grew revenue by 18% to €15.7 billion, turned a €311 million operating loss to a €1.4 billion operating profit, and more than tripled free cash flow from €678 million to €2.3 billion. The operational performance was impressive, but the share price moved even faster, rising more than fivefold from its November 2022 lows.

As Spotify’s valuation increased, we gradually reduced our exposure over the course of the year as the risk/reward became less attractive. The strong fourth-quarter result, particularly in user and subscriber growth, stretched the valuation even further and ultimately prompted our decision to fully exit. Whilst we generally dislike selling on valuation grounds alone, when things do get stretched well past their norms and to levels where the return profile no longer offers the asymmetric upside that led us to invest in the first place, we won’t hesitate to move on. Hence, we completed our exit earlier this year and redeployed the capital to other ideas with more attractive setups.”

Jim Cramer Recommends Buying Spotify (SPOT) Shares During “Periodic Moments of Underperformance”

Spotify Technology S.A. (NYSE:SPOT) is in 25th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 111 hedge fund portfolios held Spotify Technology S.A. (NYSE:SPOT) at the end of the second quarter, up from 106 in the previous quarter. While we acknowledge the risk and potential of Spotify Technology S.A. (NYSE:SPOT) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Spotify Technology S.A. (NYSE:SPOT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Spotify Technology S.A. (NYSE:SPOT) and shared Montaka Global Investments’ views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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