Amid growing concern about employee safety in the wake of Russia’s new media restriction laws, music streaming platform Spotify Technology SA (NYSE: SPOT) has decided to completely discontinue its Russia operations.
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Apart from music streaming, Spotify also hosts several podcasts with political content. Shares of Spotify closed down 2.2% at $146.04 on March 25. Year-to-date, its stock is down more than 40%.
Russia Enforces New Media Laws
Since the onset of the Russia-Ukraine war, a number of Western companies have exited the invading nation, and imposed numerous sanctions on it.
In response, the Russian government has imposed several restrictions trying to curb the influence of western media on its masses. In one such attempt, the Kremlin has issued a new law that carries up to 15 years imprisonment if anyone is convicted of spreading false news about its invasion of Ukraine.
The new media law has compelled many leading news stations to exit Russian territory. The law even refuses to call the war a “war” and instead names it a “special military operation”.
Following these updates, Spotify had earlier decided to discontinue its paid premium services in the country. But with more stringent laws coming along, Spotify fears for the lives of both its streamers and listeners and has decided to completely shut off all its operations in Russia. Spotify expects to exit its Russian operations fully by early April.
Official Comments
Commenting on its difficult decision, a spokesperson for the company said, “Spotify has continued to believe that it’s critically important to try to keep our service operational in Russia to provide trusted, independent news and information in the region. Unfortunately, recently enacted legislation further restricting access to information, eliminating free expression, and criminalizing certain types of news puts the safety of Spotify’s employees and possibly even our listeners at risk.”
Wall Streets’ View
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 15 Buys, seven Holds, and one Sell. The average Spotify price target of $242.91 implies 66.3% upside potential to current levels.
Website Traffic
TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into SPOT’s performance.
In February, Spotify website traffic recorded a 9% year-over-year decrease in monthly visits. However, year-to-date website traffic growth increased by 25% compared to the same period last year.
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