Spotify Technology S.A.
Thesis
Spotify is a good product but a bad business due to its high payout to record labels and increasing competition from major tech players. The company pays out 52% of its revenue to the Big Three record labels, which control the majority of the market. This, combined with low barriers to entry for competitors, suggests significant downside potential for Spotify's stock.
Did it work?
The thesis that Spotify is a bad business due to high payouts to record labels and increasing competition has played out significantly, as evidenced by the stock's decline of 211.1%. The substantial drop in price confirms the anticipated downside potential outlined in the pitch. Given that 80 months have elapsed, which is well beyond a typical investment horizon, the thesis can be confidently deemed successful.
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