Spotify (SPOT) Stock: Fake Streams Fuel $3M Prediction Market Controversy

TLDR

• Spotify removed over 500,000 fake streams that artificially boosted Malcolm Todd’s song “Earrings” up the charts.
• The inflated stream counts were used to settle a Kalshi prediction market on June’s most-streamed U.S. song, which had $3 million in trading volume.
• Todd had been declared a winner before Spotify finished its investigation into the suspicious activity.
• Some early bettors who bought in when Todd’s odds were below 3% may have earned up to 30x their investment.
• Spotify has asked both Kalshi and Polymarket to remove its branding and clarify they have no official partnership.

Spotify detected a wave of fake streams designed to game a real-money prediction market — and it’s raising questions about how these platforms handle manipulation.

Spotify Technology S.A., SPOT

Spotify (SPOT) stock was up 2.86% as the story broke. The company confirmed it removed more than 500,000 artificial streams that had pushed Malcolm Todd’s song “Earrings” near the top of its U.S. charts for June.

The problem? Those inflated numbers had already been used to settle a Kalshi prediction market before Spotify could complete its investigation.

That particular market — which bet on the most-streamed Spotify song in the U.S. for June — attracted around $3 million in trading volume.

Todd had been officially declared one of the winners based on early figures. Before the streaming spike, his odds of topping the chart sat below 3% on Kalshi.

That means some traders who got in early, at very low prices, may have walked away with returns of around 30 times their original stake.

Spotify has since reached out to both Kalshi and Polymarket, asking them to remove its logo and make clear that neither platform has an official relationship with the streaming company.

Kalshi spokesperson Elisabeth Diana confirmed the company is responding. “We’re in touch with Spotify and are actively investigating this matter,” she said. Polymarket did not immediately respond to a request for comment.

How the Manipulation Worked

The mechanics here are straightforward. Prediction markets pay out based on real-world outcomes. If you can move the underlying data — in this case, stream counts — you can move the outcome of the bet.

Spotify said streaming platforms regularly deal with attempts to pump stream numbers. It also noted that it does not pay royalties on streams it identifies as artificial.

This isn’t the first time prediction markets have run into this kind of problem. Similar manipulation attempts have been tied to war maps and weather station data in the past.

Wall Street Still Likes SPOT

Despite the controversy, Wall Street’s view on the stock hasn’t shifted. Analysts currently hold a Strong Buy consensus on SPOT, based on 19 Buy ratings, five Holds, and zero Sells over the past three months.

The average price target sits at $610.61, implying roughly 25.7% upside from current levels.

Kalshi said it is actively investigating the situation. No further update has been issued by either prediction market platform at time of publication.

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