State Champ Radio Billboard Global Music Index
HYBE was rocked by controversy this week after an audit of one of its subsidiary labels, ADOR, allegedly revealed that the label’s CEO, Min Hee-jin, “deliberately led the plan to take over management control of the subsidiary,” according to a statement sent by the company on Thursday (April 25).
Shares of HYBE fell 7.8% on Monday (April 22) and ended the week down 12.6% to 201,500 won ($146.22). HYBE later reported Min, who owns an 18% stake in ADOR, to the police for “breach of trust and other allegations” and asked her to step down, it said in the April 25 statement. The dispute added to HYBE’s losses at a time when most music stocks are faring well. HYBE shares have fallen 13.7% year to date and 25.4% over the last year.
HYBE was the biggest loser in a week most music companies’ stocks were up. In fact, five music companies’ stocks posted double-digit gains this week and only 7 of the 20 stocks in the Billboard Global Music Index were losers. The index gained 3.2% to 1,756.98, breaking a two-week losing streak and bringing its year-to-date increase to 14.5%.
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The week’s greatest gainer was streaming company LiveOne, which increased 14.5% to $1.90 after it provided two updates to upcoming earnings releases. On Monday, the company announced that it expects fiscal 2024 revenue of $118.5 million, up 19% from $99.5 million the previous year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $14.4 million — about 32% above $10.9 million of EBITDA in the prior year. On Wednesday (April 24), LiveOne announced that PodcastOne expects revenue of $11.7 million in the fiscal fourth quarter 2024, up 32% year over year. LiveOne spun off PodcastOne in 2023 and retained an 81% stake.
Two of the weeks’ best-performing stocks also reached their highest levels in years. Reservoir Media improved 13.8% to $9.10, its highest closing price since the stock closed at $9.20 on May 4, 2022. Chinese music streamer Tencent Music Entertainment gained 13.5% to $12.88, its best closing price since it closed at $13.02 on July 13, 2021.
Hipgnosis Songs Fund (HSF) gained 12.9% to 1.038 pounds ($1.30) as Concord and Blackstone vie for control of the company’s share equity and 65,000-song portfolio. Notably, Friday’s closing price was 5 cents, or 4%, above Concord’s high bid of $1.25 per share, suggesting that some investors expect the bidding process to continue. As the HSF board weighs its options amidst a strategic review and building strife with its investment advisor, Hipgnosis Song Management, a sale seems inevitable. “I think investors have been through such a roller coaster most of them just want their money back,” Round Hill Music CEO Josh Gruss told Billboard this week.
Spotify’s stock closed Friday up 5.0% to $289.59 after an up-and-down week. Shares rose 11.5% on Tuesday — and posted an intraday gain of 19.2% — following the release of the company’s first-quarter earnings report but gave back nearly all the gains over the next two days by falling 6.8% and 2.3% on Wednesday and Thursday, respectively.
Tuesday’s (April 23) intraday high of $319.30 was Spotify’s highest share price in over three years. The last time Spotify traded above $319.30 was Mar. 8, 2021, when shares reached $323.04. The stock dropped below $100, to $96.67, on Apr. 27, 2022, and fell as far as $69.29 on Nov. 4, 2022. Since that low point a year and a half ago, as Spotify has cut its workforce and focused on improving margins, its share price has risen 218%.
Indexes around the world posted gains this week. In the United States, the Nasdaq was up 4.2% to 15,927.90 and the S&P 500 improved 2.7% to 5,099.96. Both indexes were helped by Alphabet, which rose 10% to $173.69 on Friday after releasing first-quarter earnings and announcing a $70 billion buyback program. In the United Kingdom, the FTSE 100 rose 3.1% to 8,139.83. South Korea’s KOSPI composite index gained 2.5% to 2,656.33. China’s Shanghai Composite Index rose 0.8% to 3,088.64.
Live Nation shares fell 10.9% to $89.98 this week after The Wall Street Journal reported the U.S. Department of Justice plans to file a lawsuit against the company in the coming weeks. The DOJ could seek any number of remedies, but, in recent years, there have been calls from both the public and private sectors to break up the company and separate the concert promotion business from the ticketing business.
In February, Senator Amy Klobuchar, who helped organize the Jan. 2023 Senate hearing at which Live Nation president/CFO Joe Berchtold testified, called on lawmakers to “update and enforce antitrust laws” to prevent Live Nation and Ticketmaster from working on concert to “keep ticket prices high.”
“This merger never should have been allowed to happen,” Klobuchar wrote on X in February. “Break them up,” Senator Alexandria Ocasio-Cortez wrote in November 2022 following the Taylor Swift pre-sale fiasco. Likewise, the American Economic Liberties Project and the American Antitrust Institute have both called for the DOJ to break up the company.
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Live Nation shares have fallen 15.1% in the four weeks since the week ended March 22 but remain up 34.3% year to date. The company will report first-quarter earnings on May 2.
The large declines seen among some of the most valuable music companies caused the Billboard Global Music Index to drop 4.5% this week — its largest one-week loss since November 2022. That brought the index’s decline over the past two weeks to 7.5% after it reached an all-time high the week ended April 5.
Major stock indexes also suffered substantial losses this week. The tech-heavy Nasdaq composite fell 5.5% to 15,282.01 as video streaming giant Netflix and chipmaker Nvidia fell 9.1% and 10%, respectively, on Friday (April 19). The S&P 500 dropped 3.0% to 4,967.23. In the United Kingdom, the FTSE 100 fell just 1.2% to 7,895.85. South Korea’s KOSPI composite index lost 3.4% to 2,591.86. China’s Shanghai Composite Index was an outlier, rising 1.5% to 3,065.26.
Radio giant iHeartMedia had the biggest decline of the week after dropping 12.8% to $1.90. That brought the company’s year-to-date loss to 28.8% and its 52-week decline to 54.3%. Music streaming leader Spotify suffered the largest drop in terms of lost market capitalization, however, after an 8.2% decline, to $275.79, raised $4.9 billion of market value. Spotify will release first-quarter earnings on Tuesday (April 23).
Hipgnosis Songs Fund shares predictably surged this week on news that Concord has offered to acquire the company for $1.4 billion, or $1.16 (0.94 pounds) per share. The stock finished the week up 24.2% to 0.919 pounds ($1.14), just under Concord’s offer price. The board encouraged shareholders to accept Concord’s bid, which was a 32.2% premium over the prior day’s closing price. That would provide immediate returns, the board explained, because the company needs “substantial financial and governance changes to improve its financial performance” that will suppress the share price in the meantime.
The other big gainers for the week came from South Korea. HYBE gained 8.2% to 230,500 won ($167.70) and SM Entertainment rose 4.0% to 78,100 won ($56.82). Year to date, HYBE is down 1.3% and SM Entertainment is off 15.2%.
Shares of Spotify jumped 17.6% to $310.31 this week on a report that the streaming giant will raise prices again in select markets as well as news that it named a new CFO, Christian Luiga, a former CFO and deputy CEO at European defense and security company Saab AB.
Spotify’s newfound willingness to both raise prices and control costs has given new life to its stock price after an expensive entry into podcasting caused a downturn in 2022. Through Friday (April 5), shares of Spotify have increased 65.2% year to date and 134.2% over the past 12 months. Not even Believe, up 57.1% in 2024 thanks to competing interests to acquire the company, has matched Spotify’s momentum this year. Sphere Entertainment has also enjoyed a boost on Wall Street since U2’s inaugural residency at the $2.3-billion Las Vegas venue, but its 37.7% gain in 2024 also lags behind Spotify.
For more than a decade, Spotify kept its subscription prices low and emphasized subscriber growth over profits. The market’s mood has shifted in recent years, though. Once satisfied with growth in user numbers, investors now want high-flying streaming companies to be profitable, too. Since Spotify announced a price increase on July 24, 2023, the share price has increased 89.5% and raised the company’s market capitalization by roughly $29 billion to $61.5 billion. The share price has gone up 71.7% since Spotify announced it would cut 16% of its staff on Dec. 4, 2023.
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This week, investors reacted to a Bloomberg report that Spotify is raising subscription prices in select markets and will pass another rate hike in the United States later this year. Following the news, Spotify gained 8.2% to $291.77 on Wednesday (April 3). Labels appeared to benefit, too: Universal Music Group rose 5.5% and Warner Music Group gained 5.8% on Wednesday following news of the price increase.
Rather than shy away from price increases in successive years, Spotify could have a unique ability to withstand higher prices compared to its peers. Morgan Stanley analysts wrote in an investor note on Thursday (April 4) that music is “broadly under-monetized” and the quality of Spotify’s product gives it “unique pricing power.” Guggenheim analysts wrote in a report on Wednesday that they believe the price increase could mean a “9% revenue impact” in the affected markets.
What’s more, the higher prices could help Spotify by improving its audiobook business. Spotify now gives subscribers in the United States and some other markets 15 hours of free audiobook streaming per month; users can also purchase additional listening time and buy audiobooks to keep. A recent Morgan Stanley survey revealed Spotify was used by 38% of audiobook listeners, second only to veteran audiobook platform Audible despite Spotify having launched audiobooks only a few months before the survey. “Audiobooks appear to be perhaps a larger revenue opportunity than podcasting based on this survey works and long-standing consumer price points for books,” Morgan Stanley analysts wrote.
The Billboard Global Music Index dropped 0.2% to 1,748.38 as nine of the index’s 20 stocks were winners, 10 were losers and one was unchanged. No company other than Spotify posted a double-digit increase, however, and three companies — iHeartMedia, Cumulus Media and Anghami — had double-digit declines.
Stocks were mixed globally this week. In the United States, the Nasdaq composite dropped 0.8% to 16,248.52 and the S&P 500 fell 1.0% to 5,204.34. The United Kingdom’s FTSE 100 fell 0.5% to 7,911.16. China’s Shanghai Composite Index rose 0.9% to 3,069.30. South Korea’s KOSPI composite index lost 1.2% to 2,714.21.
Music streaming company Anghami (NASDAQ: ANGH) was the biggest loser of the week after dropping 41.1% — it lost 44.5% on Wednesday alone — after OSN Group, a premium entertainment provider for the Middle East-North Africa region, acquired a 55.45% stake. The deal, first announced in November 2023, combines the Abu Dhabi on-demand music streaming service with a paid, on-demand video streaming platform that carries both Arabic and Turkish titles and content from Western brands such as HBO, Universal Pictures and Paramount.
HYBE shares jumped 17.5% to 230,000 won ($170.84) this week following news that the company struck a 10-year partnership with Universal Music Group (UMG) that calls for the label to distribute HYBE’s physical and digital music and put its artists on HYBE’s Weverse social media platform. HYBE America CEO Scooter Braun will oversee all promotional and marketing collaborations between the two companies. After dropping 9.1% over the previous four weeks, the announcement brought the South Korean company’s year-to-date deficit to just 1.5%.
Another K-pop company, SM Entertainment, was one of five music companies to post double-digit stock gains this week, with its shares rising 14% to 87,800 won ($65.22). On Wednesday (March 27), the company announced the appointment of Tak Young-jun to co-CEO alongside existing CEO Jang Cheol-hyuk. SM Entertainment also announced a 1,200-won ($0.89) per-share dividend totaling 28.1 billion won ($20.8 million), an amount equal to the prior year’s dividend.
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The 20-company Billboard Global Music Index rose 1.9% to a record 1,752.24 as 16 stocks posted gains, only three lost ground and one was unchanged. Even with an unusually high number of winners, the float-adjusted index, which gives greater weight to more valuable companies, fell this week because two of the three losers are among the most valuable music companies. Spotify, which has a market capitalization of roughly $50 billion, fell 0.4% to $263.90. Live Nation fell 0.2% to $105.77; its market capitalization is about $24 billion. Two more of the index’s largest companies had gains under 2%: UMG rose 1.6% to 27.88 euros ($30.11) and Warner Music Group (WMG) improved 1.4% to $33.02. Another valuable member of the index, Chinese music streamer Tencent Music Entertainment, rose 2.2% to $11.19.
Hipgnosis Songs Fund shares climbed 13.5% to 69 pence ($0.87) after the company’s board of directors released an internal report on Thursday (March 28) that showed the fund’s investment advisor, Hipgnosis Song Management, “materially” overstated annual revenue and misled investors about the amount of control exercised over the rights in its portfolio. The negative news was welcomed by investors who have taken issue with the company’s accounting practices and portfolio valuation. Hipgnosis shares traded as low as 52.9 pence ($0.67) on March 4 but have rebounded since the company overhauled its board and hired Shot Tower Capital to put together the due diligence report.
CTS Eventim, the German live events promoter and ticketing company, rose 11.1% to 82.45 euros ($89.05) after releasing earnings for the fourth quarter and full-year 2023 on Tuesday (March 26). The company expects “a moderate rise” in total revenue in 2024. Demand is “rising continuously,” CEO Klaus-Peter Schulenberg wrote in the annual report, and the company expects the recent decline in inflation to provide “new, consumption-driven impetus for growth in the future.”
Believe shares rose 7.2% this week to 16.92 euros ($18.27) following the company’s announcement that it will accept a formal offer from WMG by April 7. WMG revealed its interest in Belief on March 7 and said it would be willing to pay at least 17 euros ($18.36) per share. A consortium that includes Believe CEO Denis Ladegaillerie has lined up a large block of shares and is willing to offer 15 euros ($16.20) per share for the remainder. With Believe shares currently trading so close to WMG’s soft bid, investors apparently don’t think the consortium’s original offer is going to suffice.
Stocks were mixed as the trading week was shortened by some exchanges’ closure for Good Friday. In the United States, the Nasdaq composite fell 0.3% to 16,379.46 and the S&P 500 rose 0.4% to 5,254.35. In the United Kingdom, the FTSE 100 rose 0.3% to 7,952.62. South Korea’s KOSPI composite index fell 0.1% to 2,746.63. China’s Shanghai Composite Index dropped 0.2% to 3,041.17.
Music stocks’ performance this week was a microcosm of the entertainment industry this decade, with streaming companies making up the top four performers while legacy broadcasting stocks finished at the bottom of the heap.
Chinese music streaming company Tencent Music Entertainment rose 6.0% to $10.95 following the company’s encouraging full-year earnings results on Tuesday (Mar. 19). Although total revenue declined 2.1%, the online music part of the business is booming. Subscription revenue from QQ Music, Kuwo Music and Kugou Music increased 39.1% to $1.7 billion while the number of subscribers grew by 18.2 million to 106.7 million. Tencent Music shares reached a 52-week high of $11.80 on Thursday (Mar. 21) but dropped 4% on Friday (Mar. 22) following news that Zhenyu Xie, president/chief technology officer, tendered his resignation. Xie will be replaced on the board of directors by CFO Shirley Hu.
Spotify gained 3.9% to $264.95, bringing its year-to-date improvement to 41.0%. On Tuesday, the streaming company released its fourth annual Loud & Clear report, a breakdown of the prior year’s royalty payouts. In 2023, the number of artists who received at least $10,000 from Spotify increased 16% to 66,000 — 2.7 times more than the number who received that much in 2017. The number of artists who earned $1 million or more from Spotify rose 18% to 1,250.
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Two smaller companies posted even larger gains. Anghami shares rocketed 56.8% to $1.74 this week and reached as high as $2.20 after a regulatory filing revealed that Saudi media company MBC Group had amassed nearly a 14% stake in the Abu Dhabi-based music streamer. The investment helped give Anghami some breathing room after the Nasdaq warned in October that the stock faced delisting for closing under $1 for the prior 30 days. Anghami closed below $1 from Feb. 1 to Mar. 7 but has closed above $1 since Mar. 15.
LiveOne jumped 10.9% to $2.04 after announcing on Monday (Mar. 18) that it expects record quarterly revenue with the help of increased Tesla sales, 30 new podcasts and more than $2 million in monthly recurring revenue from clients in its B2B streaming business. Additionally, the company revealed that it repurchased $250,000 worth of stock in the previous 30 days and extinguished $3 million of payables of PodcastOne, the podcast company it spun off in September 2023.
Streaming companies’ gains helped the Billboard Global Music Index rise 1.3% to a record 1,719.66 this week, breaking a two-week skid and topping the previous record of 1,715.81 set the week ended Mar. 1. The 20-company index had an even number of winners and losers.
Major indexes rose to new heights after the U.S. Federal Reserve indicated the central bank still expected three interest rate cuts in 2024 despite a recent increase in inflation. In the United States, the Nasdaq composite rose 2.9% to 16,428.82, a new closing high, and reached an intraday high on Thursday. The S&P 500 finished the week up 2.3% to 5,234.18, even after falling 0.1% on Friday. In the United Kingdom, the FTSE 100 gained 2.6% to 7,930.92. South Korea’s KOSPI composite index rose 3.1% to 2,748.56. China’s Shanghai Composite Index fell 0.2% to 3,048.03.
Broadcasters were at the opposite end of the spectrum. The index’s biggest decliner was iHeartMedia, which fell 7.7% to $1.91. After a sluggish year for national advertising, iHeartMedia executives have predicted 2024 will be “a recovery year” and first-quarter revenue decline will be less severe than previous quarters. Maybe so, but investors have dropped its stock 28.5% year to date.
Two other radio companies were among the bottom four stocks. Cumulus Media shares fell 6.6% to $3.41 and are down 35.9% in the first 12 weeks of the year. Cumulus’ revenue was down 11.4% in 2023, and CEO Mary Berner warned investors in February that “choppy” ad demand limited its ability to forecast in 2024.
SiriusXM, which is optimistic about its redesigned streaming app, dropped 4.2% to $3.88 and has fallen 29.1% this year. Liberty Media, which owns 84% of SiriusXM’s outstanding shares, plans to merge the SiriusXM stock with the Liberty SiriusXM track stock later this year.
Live Nation shares gained 4.0% to hit $103.77 this week, marking the stock’s best closing price since May 2, 2022, and the first time the concert promotion giant had five straight closes above $100 since late April and early May that same year.
Other music stocks didn’t fare as well. Most of the 20 companies in the Billboard Global Music Index dropped this week, with 13 stocks losing ground and just seven finishing the week in positive territory. The index fell 0.1% to 1,697.90, marking the first time it’s decreased in successive weeks since it fell during three consecutive weeks in October 2023. Multi-week declines are rare for the index: Since the beginning of 2023, it has had just two two-week declines, two three-week declines and one four-week decline (in July and August 2023). This week’s slight drop brought the index’s year-to-date gain to 10.8%.
In a relatively quiet week free of earnings releases or market-moving news, there was roughly an even mix of gains and losses from the most valuable companies. Universal Music Group increased 2.1% to 27.32 euros ($29.77) while Spotify dropped 1.7% to $254.89 and Warner Music Group (WMG) fell 2.9% to $32.94. Elsewhere, German promoter CTS Eventim rose 2.1% to 76.70 euros ($83.56) and reached a new 52-week high of 77.80 euros ($84.76).
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K-pop companies rebounded after a string of weekly declines. HYBE improved 2.3% to 199,000 won ($149.59) and SM Entertainment climbed 2.5% to 74,900 won ($56.30). YG Entertainment jumped 6.3% to 43,050 won ($32.36) but is still down 19.6% year to date.
French indie music company Believe finished at 15.52 euros ($16.91), still well above the 15.00 euros ($16.34) tender offer by a consortium that seeks to take the company private. WMG has expressed interest in Believe at 17.00 euros ($18.52) per share.
The companies with the largest gains and losses are among the least valuable on the index. The week’s greatest gainer was Abu Dhabi-based music streamer Anghami, which rose 15.6% to $1.11 and has a market capitalization of just $30.7 million — less than 0.1% of Spotify’s. Radio broadcast giant iHeartMedia and French music streamer Deezer had the index’s biggest losses of 10.0% and 10.3%, but iHeartMedia’s market cap is only $255 million while Deezer’s is about 245 million euros ($267 million).
The index’s four live music stocks had an average gain of 0.9% this week, topping the 0.4% gain of the seven record label and publishing stocks. Five streaming stocks averaged a less than 0.1% decline. Three radio companies — iHeartMedia, Cumulus Media and SiriusXM — had an average decline of 5.1%.
Key U.S. indexes also saw small declines this week. The Nasdaq composite fell 0.7% to 15,973.17. The S&P 500 fell 0.1% to 5,117.09. In the United Kingdom, the FTSE 100 gained 0.9% to 7,727.42. South Korea’s KOSPI composite index declined 0.5% to 2,666.84. China’s Shanghai Composite Index grew 0.3% to 3,054.64.
(WMG) revealed its interest in acquiring the French music company.
Believe shares rose 2.5% to 15.88 euros ($17.38) after WMG announced its interest in the owner of distributor TuneCore, publishing administrator Sentric and such record labels as Naïve and Groove Attack. Last week, Believe announced it had interest from an unnamed party, which caused the share price to exceed the 15 euro ($16.52) per share offer from a consortium led by CEO Denis Ladegaillerie and investment funds EQT and TCV. After the potential suitor was given a name, Believe’s share price rose even more. WMG, which hasn’t made an official offer, said it would pay “at least” 17 euros ($18.60) per share. WMG shares fell 4.4% to $33.93 this week.
With Believe trading at 15.88 euros ($17.38), investors don’t appear convinced that WMG will make an offer at 17.00 euros. Not only would WMG need to pass regulatory scrutiny, the Ladegaillerie consortium has a head start and appears to be moving quickly to close the deal. Last week, the consortium said it waived the board’s condition that an independent expert weigh in on its offer’s fairness to shareholders. WMG’s announcement singled out the maneuver, stating that “WMG considers that such a waiver violates a number of rules of French securities regulations which are meant to protect shareholders (including the sellers and their investors) and the Company, and that the validity of such waiver could be challenged.”
Sphere Entertainment Co. shares rose 10.1% this week to $48.77, adding $127 million to the company’s market capitalization and bringing its year-to-date gain to 43.5%. Three of four live music companies posted gains in an otherwise muted week for music stocks: German promoter CTS Eventim gained 2.2% to 75.10 euros ($82.19), while on Thursday (Mar. 7), Live Nation shares surpassed $100 for the first time since May 2, 2022. The concert giant finished the week up 2.7% to $99.75.
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The 20-company Billboard Global Music Index fell 0.9% to 1,700.37 this week as half the stocks were gainers, nine were losers and one was unchanged. Streaming stocks had an average gain of 4.2% thanks to an 18.4% improvement by music streamer LiveOne. Abu Dhabi-based streaming company Anghami rose 3.2%. The bigger streaming companies lost ground, however. Spotify fell 1.6% to $259.40, a rare stumble for a stock that has gained 38.1% year to date. Deezer shares dropped 0.4% to 2.24 euros ($2.45).
K-pop stocks were down across the board this week. JYP Entertainment, home to Twice and Stray Kids, fell 8.0%. SM Entertainment, home to aespa and Girls’ Generation, dropped 6.5%. HYBE sank 2.3% and YG Entertainment, the company behind BLACKPINK, slipped 1%. The four companies have an average year-to-date loss of 22.7%. HYBE’s 16.7% decline in 2024 is the best of the group. Elsewhere, JYP Entertainment shares have fallen 33.1% and SM Entertainment and YG Entertainment dropped 20.6% and 20.4%, respectively.
Stocks were mixed globally. In the United States, the Nasdaq composite dropped 1.2% to 16,085.94 and the S&P 500 declined 0.3% to 5,123.69. U.S. stocks reached new records on Thursday following comments by Federal Reserve chief Jerome Powell that indicated the central bank will ease interest rates. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell told the House Committee on Financial Services on Wednesday (Mar. 6).
Stocks ended the week on a down note after Friday’s U.S. jobs report offered mixed messages to investors. Total confirmed payroll rose by 275,000 in February, but at the same time, the unemployment rate rose by 0.2 percentage points to 3.9% and wages rose just 0.1% in February — not necessarily welcome indicators, but perhaps signs that the Federal Reserve can move ahead with future rate cuts without fearing the economy will overheat.
In the United Kingdom, the FTSE 100 fell 0.3% to 7,659.74. South Korea’s KOSPI composite index rose 1.4% to 2,680.35. China’s Shanghai Stock Exchange index improved 0.6% to 3,046.02.
Cumulus Media led all music stocks this week by gaining 20.2% to $4.70 after the radio broadcaster announced it had employed a “poison pill” to ward off a Singapore-based investor.
In January, Renew Group Private Ltd increased its stake in Cumulus Media from 5.2% to 10.01%. To protect the best interests of all Cumulus shareholders, the board of directors explained, the company chose to enact a “limited-duration shareholder rights plan” that would dilute Renew Group’s equity if it exceeds a 15% stake. In justifying the move, Cumulus said Renew Group has investments in other media companies, including a direct competitor to Cumulus.
Music stocks were broadly up this week as the Billboard Global Music Index improved 1.5% to a new high of 1,684.49. The index is up 9.8% in the young year and has gained 38.4% over the past 52 weeks. Of the index’s 20 stocks, 13 finished the week in positive territory, six lost value and one was unchanged.
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Stock markets around the world reached new highs this week, too. In the United States, the Dow reached a new closing high of 5,088.80 on Friday (Feb. 23) after surpassing 5,100 for the first time earlier in the day. The Nasdaq composite also reached a new high on Friday and finished the week up 1.4% to 15,996.82. The S&P 500 improved 1.7% to a new closing high of 5,088.80. Japan’s Nikkei 225 index reached an all-time high on Thursday (Feb. 22), finally surpassing the previous record reached in 1989 when the Japanese economy was the world’s envy.
Music streamer LiveOne was the second-best performing music stock of the week after its shares jumped 17.9% to $1.71, bringing its year-to-date improvement to 22.1%. With no other music stocks posting double-digit gains, the next best performance came from Chinese music streamer Cloud Music. Its shares rose 4.1% to 90.95 HKD ($11.63) as Chinese stocks finished the week strong after hitting a five-year low in February. In an attempt to bolster the market, Chinese regulators this week established trading restrictions such as limits on short-selling and institutional investors.
Spotify shares gained another 4.0% this week to close at $256.10, bringing its year-to-date gain to an impressive 36.3% (which has added approximately $13.4 billion to its market capitalization). On Wednesday (Feb. 21), the company announced the creation of a new music advisory agency, AUX, that will connect brands with artists. The inaugural campaign matches Coca-Cola with DJ-producer Peggy Gou in what the company called “a long-term partnership that will span live concerts and events, social media content, a branded playlist, and on-platform promotional support.”
Live Nation shares finished the week up 2.2% to $95.32 and rose 2% on Friday following the company’s encouraging fourth-quarter earnings release. Morgan Stanley raised its price target from $110 to $120 in part because Live Nation said it expects double-digit growth in adjusted operating income in 2024 thanks to a busy touring schedule in its high-margin amphitheaters. “This is going to be a great year,” president/CEO Michael Rapino said during Thursday’s earnings call.
Radio broadcaster iHeartMedia was the index’s biggest loser of the week after dropping 12.5% to $2.32. The company will announce its results for the fourth quarter of 2023 on Feb. 29.
The Sphere venue in Las Vegas isn’t turning a profit, but it’s doing enough to encourage investors to buy into its owner, Sphere Entertainment Co.
Shares of Sphere Entertainment gained 13.8% to $40.29 this week after the company’s quarterly earnings report released Monday (Feb. 5) showed that the state-of-the-art venue — currently capturing eyeballs ahead of the Super Bowl in Las Vegas on Sunday — took in revenue of $167.8 million and had an adjusted gain of $14 million (adjusted to certain items including $117 million of non-cash impairment related to the company’s failed bid to open a Sphere in London).
Sphere Entertainment was the top-performing music stock in a week when music stocks soared to new heights, with the 20-company Billboard Global Music Index gaining 3% to land at a record 1,636.43. While the numbers of winners and losers were even at 10 stocks apiece, most of the index’s most valuable companies posted gains this week. Tencent Music Entertainment rose 6.7% to $9.67, Live Nation improved 1.5% to $89.53 and Universal Music Group gained 1.2% to 27.41 euros ($29.55).
Spotify, another of the index’s largest companies, gained 8.2% to $240.77 after its earnings results on Tuesday (Feb. 6) showed its subscriber number grew to 236 million, up 10 million in the quarter, and that revenue grew 16% to 3.67 billion euros ($4.05 billion). The share price reached its highest mark since December 2021 as investors discovered a renewed faith in Spotify following its decision to cut 17% of its workforce in December. Spotify has always had a good product. Now, there is a growing feeling it can be a good business, too.
“The market is now seeing the potential of this business,” Morgan Stanley analysts wrote in a Wednesday (Feb. 7) note to investors, “as record [monthly active user] net adds and subscribers come alongside price increases and an aggressive turn towards cost efficiency.” Stronger revenue growth and the potential for better margins led Morgan Stanley to raise its Spotify price target from $250 to $270.
Major indexes gained this week, too, and one reached a major threshold: The S&P 500 closed above 5,000 for the first time on Friday as it rose 1.4% to 5,026.61, while the Nasdaq composite improved 2.3% to 15,990.66, its highest level since 2021, thanks to big gains from chip maker Nvidia and e-commerce giant Amazon. In the United Kingdom, the FTSE 100 declined 0.6% to 7,572.58. South Korea’s KOSPI composite index rose 0.2% to 2,620.32. China’s Shangai Composite Index jumped 5% to 2,865.90.
It was a busy week for corporate earnings reports. CTS Eventim shares rose 5.5% to 66.90 euros ($72.12) following the company’s fourth-quarter results Wednesday. The German concert promoter’s 2023 revenue reached 2.4 billion euros, up 22.5%, and earnings before interest, taxes, depreciation and amortization improved 31.9% to 501.4 million euros.
Warner Music Group (WMG) shares briefly rallied following its earnings results on Thursday — with the stock up 5.1% to $38.05 — but it finished the day down 2.5% and the week down 2.6% to $35.71. Morgan Stanley analysts remained “overweight” on WMG and kept the price target at $42. Guggenheim analysts reiterated their “buy” rating and maintained their $46 price target.
MSG Entertainment shares rose 9% to $36.81 after the company’s fiscal second-quarter earnings results were released Wednesday. The New York-based live entertainment company raised revenue guidance for its full fiscal year by 10% to a range of $930 million to $950 million. Executive chairman/CEO James Dolan attributed the strong quarter to “record results” from the Christmas Spectacular production, the long-running show featuring the Radio City Rockettes.
LiveOne shares fell 2.1% after PodcastOne reported a 22% increase in revenue in the first nine months of its fiscal year on Thursday (Feb. 8). (LiveOne spun off PodcastOne in 2023 and retained a 73% stake.) PodcastOne ranked No. 10 in Podtrac’s top publisher’s rankings and achieved a U.S. audience of 5.3 million, but its net loss increased from $3 million to $13.7 million.
K-pop is having amazing charts and sales success and selling out large venues around the world, but the South Korean companies behind those artists are off to a terrible start in 2024.
Through Friday (Feb. 2), four K-pop stocks — HYBE, SM Entertainment, JYP Entertainment and YG Entertainment — have fallen an average of 17% year to date. HYBE, home to BTS and its members’ various solo projects, has had the best performance with a 12% decline, while JYP Entertainment is the worst of the group with a 24.1% loss. Elsewhere, YG Entertainment has lost 14.7% and SM Entertainment is down 17.4%. Korean stocks in general have gotten off to a much better start: Through Feb. 2, the KOSPI composite index of Korean companies increased 5.5%.
Investors may feel K-pop’s finances are less than reliable after news broke this week that Kakao Corp. is auditing SM Entertainment’s financial practices following its acquisition of a 40% equity stake in 2023, according to reports out of South Korea. Kakao’s audio committee is investigating “the appropriateness of investment decisions made by SM management without holding prior consultations with Kakao,” a Kakao official told The Korea Times. For the time being, Kakao is only auditing SM Entertainment’s books, not overhauling its management or considering selling its shares. Amidst heavy media coverage in Korea, Kakao went as far as to issue a statement on Monday (Jan. 29) to dispel rumors it will sell its stake in SM.
Spotify, on the other hand, is soaring ahead of its fourth-quarter earnings report on Tuesday (Feb. 6). The music streaming giant gained 3.8% to $222.31 this week, bringing its year-to-date gain to 18.4%. Spotify shares rose 1.6% on Friday after news broke the company had signed a new distribution deal with popular podcaster Joe Rogan. Spotify will sell ads for and distribute The Joe Rogan Experience on several multiple podcast platforms, according to the Wall Street Journal. So, unlike the previous deal, Rogan’s show will not be exclusive to Spotify and will be available on YouTube and elsewhere.
Although Rogan is no longer exclusive to Spotify, the deal could be extremely lucrative. An upfront minimum guarantee and ad revenue share could be worth up to $250 million, according to the report. While Rogan has proved to be enduringly popular, Spotify kept its relationship with the comedian while maintaining distance from its previous strategy of high-priced, exclusive content deals. Call Her Daddy is no longer exclusive to Spotify, Barack and Michelle Obama departed for Amazon’s Audible, and the former royals, Prince Harry and Meghan Markle, were not renewed.
Investors’ enthusiasm for Spotify hasn’t spilled over to other music streaming companies, however. Abu Dhabi-based music streamer Anghami fell 10.1% to $0.98 this week, bringing its year-to-date decline to 5.8%. Three other music streaming companies also posted losses: France’s Deezer fell 2.3%, U.S.-based LiveOne sank 5.3% and China’s Cloud Music dropped 6.2%. Tencent Music Entertainment, China’s largest music streaming company, rose 0.4%.
The Billboard Global Music Index fell 0.4% to 1,588.68 this week as 13 of the 20 stocks posted losses and only seven stocks finished the week in positive territory. Stocks were broadly up in the United States: the Nasdaq composite gained 1.1% to 15,628.95 and the S&P 500 improved 1.4% to 4,958.61. In the United Kingdom, the FTSE 100 dropped 0.3%. South Korea’s KOSPI composite index gained 5.5%. China’s Shanghai Composite Index sank 6.1% to 2,730.15.
German concert promoter CTS Eventim was the greatest gainer this week with a 4.1% gain. Two other live entertainment companies, Sphere Entertainment Co. and MSG Entertainment, ended the week up 2.8% and 0.7%, respectively.
Among the week’s biggest losers was Hipgnosis Songs Fund, which fell 7.5% to 0.653 pounds per share. Hipgnosis fell 2.5% on Friday after news broke that Merck Mercuriadis is stepping down as CEO of the fund’s investment advisor, Hipgnosis Song Management, and will become chairman. President/COO Ben Katovsky will take over the CEO role.
