Loup Funds analysts Gene Munster and Doug Clinton said Monday that Spotify Technology SA (NYSE:SPOT) is going to be “just fine” in the end despite the raging controversy over Joe Rogan and COVID-19 pandemic.
What Happened: The two Loup analysts took note of artists such as Niel Young taking issue with comments made on Spotify’s platform in relation to the ongoing pandemic.
Munster said that Apple Music, a Spotify-rival owned by Apple Inc (NASDAQ:AAPL), is now showcasing artists that have been stepping away from Spotify.
“I don't think this is the end of these conflicts,” said Clinton. He added, “This is just the most recent example we've seen conflicts on Twitter and Facebook and YouTube kind of all the major services.”
“I think we're going to continue to see disputes like this,” the analyst said.
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Why It Matters: Clinton noted that both Spotify and Rogan came out and issued statements to address the controversy that has enveloped the streaming platform.
“So what the company did in terms of issuing a statement you know saying that they're going to add some disclaimers ahead of episodes relative to Covid or other sensitive topics it seems like investors are satisfied with that as a response,” noted Clinton.
On Sunday, Spotify CEO Daniel Ek announced new policies related to COVID-19 but stopped short of censoring Rogan.
A day later, Rogan took to Instagram and said he would do his best to “balance things out” in the future.
The Loup analysts noted Spotify’s 400 million-strong user base, which only burgeoned during the pandemic. In 2019, the platform had nearly 270 million users, as per Munster.
Munster noted that Spotify's jump has been "impressive," further adding that “Maybe...there's the thought of ‘do users get burned out by somebody who's sympathetic to one of the sides and gets irritated.’”
Munster said that even if users were frustrated with something going on on the platform that they were unhappy with today, they would be happy two weeks or two months later.
Price Action: On Monday, Spotify shares soared 13.5% to $196.26 in the regular session and rose 0.2% in the after-hours trading.
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