Is The Findaway Acquisition Good For Investors? It is clear that Spotify has similar ambitions to be a leading company in the audiobook market. 1 podcast platform ahead of Apple ( AAPL)" as highlighted in my earlier Novemarticle. SPOT expanded rapidly in the podcasting space following its 2019 acquisitions, and it "is now the No. podcasts, audiobooks) of the spoken word audio market, which is defined as including "podcasts, news, sports, talk radio and audiobooks" in Edison Research's Spoken Word Audio Report 2020.Īlso, it is possible to draw a parallel between the recent Findaway deal and the company's prior "strategic acquisitions of two podcasting companies" announced in February 2019. In other words, Spotify wants to expand in key segments (e.g. SPOT also noted that this deal "will accelerate Spotify’s presence in the audiobook space", and is in line with its "ambition to be the destination for all things audio both for listeners and creators." Last month, Spotify disclosed that it had acquired Findaway, which was referred to as "the global leader in digital audiobook distribution with AudioEngine" in the announcement. The faster-than-expected growth of the audiobook business in the future is expected to be a key re-rating catalyst for SPOT's shares. With Spotify currently valued by the market at attractive low single-digit forward Enterprise Value-to-Revenue multiples, I see Spotify's shares as deserving of a Buy rating.
I think that SPOT's recent acquisition of Findaway will play a key role in the company's expansion in the audiobook market, and this is very likely to translate into faster revenue growth and higher margins for the company in the mid-term. I discuss about Spotify's acquisition of Findaway and explain why this is good for the company's investors. ( NYSE: SPOT) stays unchanged from my prior article published on Novemwhich focuses on SPOT's market leadership and growth in the podcast market. My Buy investment rating for Spotify Technology S.A.
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