Investors are going crazy for stocks like Netflix (NASDAQ: NFLX) – it’s up 128% in the last year.
Mark my word – the same thing will happen with shares of this new IPO (click here for details).
Why is this happening?
It’s simple. Old industries are being overturned by new technology companies that have embraced a simple, low-cost and user-friendly business.
Cable television is dying a slow death.
Everyone hates the cable company. Last year, there were 22 million “cord cutters” in the U.S. And that number is expected to hit 40 million by the year 2021.
Netflix is benefitting from that trend. The company has 110 million members who pay around $10 per month for unlimited video streaming.
The same thing is happening in music.
The industry has shrunk from $14.6 billion in 1999 to around $8 billion today.
Only within the last two years have revenues started improving – due to digital music royalties from companies like Apple Music and Spotify.
So, who is the big winner?
I’m betting on Spotify – the Swedish company that offers the #1 streaming music service.
Spotify has 71 million subscribers. Here in the U.S., they pay around $10 per month for unlimited streaming of music. That means you can listen to any album – in your car, home or office – for a small monthly fee.
Another 88 million customers listen for free – and receive advertising commercials.
The business earned about $5 billion in revenues in 2017 – or around $70 in annual revenue per paid subscriber.
The Wall Street Journal reports that Spotify is valued at $20 billion.
At that valuation, the market is giving the company a value of $281 per subscriber. Meanwhile, Netflix is valued at $1,256 per subscriber.
That means Netflix commands a valuation that is four times higher per subscriber.
Now, Netflix is a more established player. With higher revenues per subscriber – and a profitable business – a premium valuation is justified.
But a 4x multiple? That seems a little ridiculous.
As Spotify executes on its business plan – and moves toward profitability – I’d expect that gap to close. Frankly, I’d expect Spotify’s valuation to reach $40 billion within the next year.
That means the Spotify shares could easily double in price in 2018.
Now, you could WAIT for Spotify to begin trading on the NYSE . . . and BUY Spotify shares later this month. Or you could quickly and easily BUY pre-IPO shares today.
If you do so, you’ll get a far superior price . . . and will be ready to profit once Spotify starts trading.
There’s one more thing you need to know:
THERE ARE NO IPO SHARES AVAILABLE.
You can’t buy IPO shares. Even if you’re a billionaire CEO at Goldman Sachs.
That means you either BUY Spotify shares on the NYSE when it starts trading or you use this secret backdoor to BUY pre-IPO Spotify shares.
My bet is that Spotify will be the biggest and best performing IPO of 2018. And I’d hate to have you miss out.
Check your email tomorrow for details on Spotify’s unusual plans to go public.
Yours in Profits,