Spotify will now feature a Covid-19 information hub in response to the backlash
The shares of Spotify Technology (NYSE:SPOT) are up 8.9% to trade at $189.33, following the streaming platform's decision to create a Covid-19 information hub in response to controversy surrounding alleged misinformation on Joe Rogan's podcast. Noted folk musicians Neil Young and Joni Mitchell have taken a stance against Rogan's spreading of misinformation, both pulling their content from Spotify.
Also giving Spotify stock a boost today is a bull note from Citigroup, which upgraded the shares to "buy" from "hold." The firm cited SPOT's attractive entry points, as well as its potential for modest subscriber growth, though it did lower its price target to $240 from $275. Canaccord Genuity also slashed its price target, by $50 down to $300.
Ahead of today's coverage, the brokerage bunch was extremely optimistic on Spotify stock. In fact, 12 of the 18 covering analysts rated the equity a "buy" or better, while six still carried a tepid "hold," coming into today. Plus, the 12-month consensus price target of $298.62 is a 64.8% premium to current levels.
Options traders are blasting the equity in response to all the happenings. Already today, 11,000 calls and 5,388 puts have crossed the tape, which is five times the intraday average. New positions are being opened at the most popular contract, the weekly 2/4 202.50-strike call.
Amid a broader market pullback, Spotify lost more than $20 billion in market cap last week, already shedding nearly 19% in the first month of 2022. A brief rally in early January was cut short by the 200-day moving average. Over the last year, SPOT has turned in just three positive monthly returns, resulting in a 42% year-over-year deficit.