Spotify Technology S.A.
Thesis
Spotify's business model has negative economics due to high variable costs associated with paying record labels for each new user. The company is expected to fail to meet market expectations following unfavorable royalty negotiations, leading to a significant decline in stock price. The pitch suggests that Spotify is overvalued and offers an attractive short opportunity with a potential return of ~50% by 2020, predicting the stock will fall from ~$149 to below $75 per share.
Did it work?
The short thesis predicted Spotify would fall ~50% to below $75 by 2020 on negative unit economics and unfavorable royalty negotiations. Instead, the stock moved sharply against the short — a -267.5% return on the position implies the share price roughly tripled from the ~$149 entry — decisively invalidating both the price target and the bearish business-model thesis. The stated horizon (by 2020) has long elapsed, so this is a clear failure with high confidence.