Shares in music streaming firm Spotify (SPOT) were lower today after it was forced to deny that a service outage had been caused by a security hack.
Thousands Unable to Access App
It was reported that thousands of people in the U.K., Europe, and the U.S. were unable to use the app to stream music from Wednesday afternoon. Suggestions that the outage had been caused by deliberate means were quickly drowned out by Spotify, which said it was not the result of a hack and that it was working to resolve the issue as soon as possible.
The company did not offer any further information on what had caused the issue or for how long its services may be affected.
According to service monitoring site Downdetector, problems began at Spotify at around 1pm today with more than 20,000 reports of user issues with the service being logged since then. It said users were reporting problems with both the Spotify app and website.
Since that update, according to the BBC, thousands more users have said they have not been able to access Spotify.
Impact to Image
The number is significant but low compared to the 675 million Spotify users around the world. But the company’s speed in rejecting claims of a security breach is understandable. Such breaches have huge financial, legal and brand reputation impacts.
Even with a few thousand outages it was clear that the Spotify image had taken a hit. Lightheartedly, the BBC reported that some users had complained that they couldn’t study for their upcoming exams because of the loss of music, whilst another couldn’t do a proper workout at the gym.
However, other comments might be more concerning with users saying they had decided to switch to rivals Apple (AAPL) and Alphabet’s (GOOGL) YouTube instead.
Is SPOT a Good Stock to Buy Now?
On TipRanks, SPOT has a Moderate Buy consensus based on 18 Buy and 10 Hold ratings. Its highest price target is $740. SPOT stock’s consensus price target is $665.65 implying an 17.38% upside.
