Thread by @frankinvesting

1/

$SPOT is a dominant market leader in music streaming, above $GOOGL, $AAPL & $AMZN.

They are also now market leader in podcasts, taking over $AAPL last year.

2/

After a 46% decline from ATH, $SPOT now trades at ~3x NTM sales and ~11x NTM gross profit.

If gross margins expand in FY22, it maybe be closer to 9-10x gross profit.

3/

@TSOH_Investing made an interesting point of $SPOT possibly being the only company below a $50 Billion market cap with the potential of reaching 1 billion MAU.

Any others you can think of?

4/

$SPOT is currently executing the $NFLX playbook by spending big on original content. Most notably of course is the $100 million acquisition of the @joerogan podcast.

5/

Podcasting is probably the most appealing aspect of future growth & gross margin improvement.

Audiobooks, meditation apps, live-concerts, live-podcasts & maybe even ticket sales are all interesting prospects.

6/

A YouTube advertisement model may be an interesting avenue for podcasting at $SPOT

Taking away the inconvenience of organisation and transactions between advertisers and podcasters.

7/

The big questions for $SPOT are;

- Can they improve gross margins / is there op leverage?

- Can they maintain market share over $AAPL $GOOGL $AMZN

- Are they too dependent on the labels and could they potentially lose a label in the future?

8/

I don’t have great answers to those questions, so I’ll float it out there to $SPOT bulls like @TSOH_Investing @SleepwellCap and anyone else out there.