The music group Warner Music Group has successfully returned to the stock exchange. Shares in the company, which has musicians like Ed Sheeran, Bruno Mars and Cardi B under contract for the first time on New York’s Nasdaq, were in high demand among investors. The first price was $ 27, eight percent higher than the $ 25 issue price. Recently, the papers listed under the symbol “WMG” cost $ 28.16.
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In view of the high demand, Warner Music had already increased the number of its shares offered from 70 million to up to 77 million. With this, the investors behind the major label of the music industry, the only remaining besides Universal Music and Sony Music, managed to collect a good $ 1.9 billion on the market.
It was the largest US IPO to date in 2020. Overall, the company was valued at $ 12.75 billion. Warner Music itself does not receive any money.
Successful return to the stock exchange
The majority of the label belongs to the investment company Access Industries owned by billionaire Len Blavatnik and was already listed on the New York Stock Exchange until 2011. It is remarkable that the company was able to successfully return to the stock market during these times – the state of emergency due to the corona crisis had deterred many companies from such ventures. In the meantime, however, the mood on the markets has eased significantly again. There will be more IPOs in the near future.
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Warner Music had originally planned to price its shares on Tuesday, but since the music industry joined the protests against racism and police violence in the United States with a strike, this was delayed by one day.
Music streaming is booming in the pandemic
The group recently benefited from the pandemic music streaming boom. In the second quarter, revenues here rose by 11 percent year-on-year. Overall, however, sales in the corona crisis declined slightly and the bottom line was a loss of $ 74 million.
The longer-term business development looks better, however. In 2019, Warner Music had sales of $ 4.5 billion, an increase of 12 percent over the previous year.
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In the meantime, the music industry had almost been written off in the face of the extinction of classic recordings such as CDs and massive illegal downloads. Streaming services like Spotify, however, helped the industry make a comeback. This is paying off for the US billionaire Blavatnik – he had only paid $ 3.3 billion for Warner Music in 2011, now the company is worth almost four times as much.
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