LiveOne
Live Nation, which is facing a lawsuit brought by the Department of Justice (DOJ) under President Joe Biden, saw its share price jump on Wednesday (Nov. 6) following Donald Trump’s victory in the U.S. presidential election a day earlier.
Live Nation shares gained 7.1% to $125.99 and rose as high as $127.64, just shy of its all-time high of $127.75 set on Nov. 5, 2021. Investors could see Trump’s re-entrance into the White House as a good sign for Live Nation’s efforts to thwart efforts by the DOJ to break up the company.
In a lawsuit filed in May, the DOJ alleged Live Nation abused its market power to hurt competition through exclusive ticketing contracts and threats and retaliations against venues that choose competing ticketing companies, among other actions the DOJ claims are illegal and violate the consent decree that placed competition-enhancing restrictions on the 2010 merger of Live Nation and Ticketmaster.
Trending on Billboard
“The change in administration typically brings a change in the climate around anti-trust efforts and could impact a case such as Live Nation,” says Bill Morrison, a partner at Haynes and Boone. “It depends on the who are in those key spots, and then what the priorities are of those offices. We’ve seen big pivots in the past.”
Faced with the prospect of fewer regulations and an administration perceived to be pro-market, U.S. indexes posted big gains on Wednesday. The Dow Jones Industrial Average gained 3.6% to a record high. Similarly, the Nasdaq composite rose 3.0% and the S&P 500 improved 2.5% as both reached all-time highs. The NYSE composite gained 1.9% but fell short of its all-time high.
Stocks associated with Trump also fared well, including Tesla, whose CEO, Elon Musk, campaigned heavily for Trump. The company’s shares rose 14.8% while its competitors Rivian and Lucid Group fell 8.3% and 5.3%, respectively. Trump Media & Technology Group Corp., owner of the Truth Social app used by Trump, rose 5.9%.
Bitcoin rose 9.4% to an all-time high of $76,012 on Wednesday. Trump has signaled a laissez-faire approach to cryptocurrency and said he would quickly fire Securities and Exchange Commission chair Gary Gensler, a critic who has punished numerous crypto companies and favors tighter regulations. Trump himself is involved with a new cryptocurrency through World Liberty Financial, a decentralized finance startup that sells a token called WLFI.
In other music stocks news, music streamer LiveOne jumped 28.5% a day ahead of the company’s earnings release for the quarter ended Sept. 30 while iHeartMedia shares fell 12.6% following news that the radio broadcaster cut dozens of jobs at stations across the country this week.
Music streaming company LiveOne will continue to have a relationship with auto manufacturer Tesla but with less advantageous terms. Starting in December, Tesla will no longer subsidize LiveOne products for some of its customers.
For years, LiveOne’s relationship with Tesla has been a cornerstone of its music streaming business; Tesla vehicles sold in the U.S. with Tesla’s Premium Connectivity package included a membership to LiveOne’s Slacker Radio that was paid by the car maker. The “streaming” button on the Tesla console led drivers to the subsidized, LiveOne-powered streaming platform without needing to connect to the app through their smartphones.
Over the years, LiveOne remained a key streaming partner as the automaker added other streaming apps to its console. Now, LiveOne is losing its preferred status. Starting Tuesday (Oct. 1), Tesla replaced the “streaming” button with a LiveOne-branded app. Come December, LiveOne will no longer be free, although Tesla will continue to pay grandfathered LiveOne accounts in perpetuity.
Trending on Billboard
While Tesla will no longer subsidize the streaming radio subscriptions, LiveOne will offer Tesla owners discounted LiveOne packages. “The conversion opportunity has enormous upside by offering Tesla owners an opportunity to upgrade and have access on all devices at discounted priority pricing,” LiveOne CEO Robert Ellin said in a statement. “We’ll drive growth, unlock new revenue streams, own our data, and increase ARPU.”
In the near term, however, the amended partnership will hurt LiveOne’s financials. In Tuesday’s announcement, LiveOne reduced its guidance for consolidated fiscal 2025 revenue to $120 million to $135 million from $140 million to $155 million. At the midpoints, the change represents a 13.6% decline. Also, LiveOne lowered guidance for earnings before interest, taxes, depreciation and amortization to $8 million to $15 million from a range of $16 million to $20 million — a 36% decline at the midpoints.
The news sent LiveOne shares down as much as 32.6% to $0.64 before closing at $0.73, marking a 23.1% decline from the prior day’s closing price. Combined with LiveOne’s 23.2% drop in share price last week and Monday’s 10.5% decline, the stock has lost 47% in just the last seven trading days.
Tesla’s paid members increased 15 times since LiveOne acquired Slacker in 2017, according to a LiveOne investor presentation from March. LiveOne’s management is focused on establishing new business-to-business and has been in discussions with 50 potential partners, according to the document.
Shares of Spotify rose 8.0% to $365.00 this week to lead all music stocks in a week the Billboard Global Music Index reached a new high and many of its largest components posted mid- to high-single digit gains.
The Swedish music streaming giant was boosted by a report by Pivotal Research Group that increased its price target to $510 from $460 and reiterated its “buy” rating. Spotify’s intraday high of $368.29 on Thursday set a new 52-week high for the stock and was its best mark since Feb. 21, 2021.
Spotify led the 20-company Billboard Global Music Index (BGMI) to a record high 1,873.87, up 4.1% for the week, as ten of the stocks posted gains this week, nine lost value and one was unchanged. After a 4.8% drop the week ending Sept. 6 and stagnating since March, the BGMI has gained 7.4% in the last two weeks and raised its year-to-date gain to 22.2%—more than two percentage points above the gains of the Nasdaq composite (up 19.6%) and the S&P 500 (also up 19.6%).
Trending on Billboard
Stocks generally had a good week after the U.S. Federal Reserve announced on Wednesday a rate cut of half a percentage point, the first time the central bank lowered the overnight borrowing rate since the early days of the COVID-19 pandemic. Investors had expected the Fed’s move, though, and had priced the effect of a rate cut into stock prices. Still, the Nasdaq composite climbed 1.5% to 17,948.32 and the S&P 500 rose 1.4% to 5,702.55. South Korea’s KOSPI composite index improved 0.7% to 2,736.81 and China’s Shanghai Composite Index rose 1.2% to 2,736.81. In the United Kingdom, the FTSE 100 fell 0.5% to 8,229.99.
Warner Music Group gained 4.9% to $30.44. WMG’s Atlantic Music Group laid off about 150 people Thursday as part of a restructuring plan that began in February. The week’s intraday high of $30.88 was WMG’s highest price since reaching $32.34 on July 24. The company also announced in an SEC filing this week it secured a $1.3 billion term loan that will be used to repay an existing loan and pay associated fees and expenses.
Live Nation shares also gained 4.9% to $103.65 and brought its year-to-date improvement to 10.7%. Thursday’s intraday high of $105.42 was its highest mark since April 1 and less than $2 below its 52-week high of $107.24. The concert promoter scored a win in Portland, Ore., this week after the city council upheld an August decision to allow the development of a 3,500-capacity music venue that will be operated by Live Nation.
Two other promoters also posted gains this week. MSG Entertainment, rose 4.6% to $42.16, while CTS Eventim improved 1.2% to 87.90 euros ($98.23). Another live entertainment company, Sphere Entertainment Co., dropped 2.7% to $41.09.
K-pop companies’ modest decline was an improvement from their consistently steep drops in recent weeks. The four South Korean companies had an average loss of 1.2% this week. HYBE fell 2.4%, JYP Entertainment dipped 1.2%, YG Entertainment slipped 0.9% and SM Entertainment lost 0.2%. After surging in previous years, the quartet has an average year-to-date loss of 40.4%.
Universal Music Group fell 3.6% to 22.75 euros ($25.42) following its Capital Markets Day on Tuesday. Analysts generally felt UMG set reachable financial targets and presented a believable roadmap about its strategy for the next four years. The Amsterdam-listed company laid out a strategy to achieve 8% to 10% cumulative annual growth rate (CAGR) for its subscription revenue and above 7% CAGR for total revenue.
Music streamer LiveOne had the biggest decline of the week, dropping 6.1% to $1.38. That put shares of LiveOne into the red for 2024 with a 1.4% year-to-date loss.
Podcast and music streaming company LiveOne is being sued for allegedly “openly and illegally operating a commercial office, business event center, professional podcast interview studio, and music recording studio” out of a 6,000-square-foot mansion in Beverly Hills, according to a complaint filed May 10 by the property’s next-door neighbors.
Entertainment attorney Michael Kibler and his wife Ann Kibler allege LiveOne has been a “nuisance” since it moved to take over the lease for the house in 2022, leading to “noise at all hours of the day and night, increased foot and car traffic associated with commercial operations, and parking overflow, from the day-to-day commercial activity at the residence,” according to the lawsuit, which was filed by Kibler’s law partner John Fowler.
The house is located in the famed Beverly Hills Flats neighborhood, which has long struggled to balance the privacy and safety needs of its wealthy residents with the hustle and bustle of West Hollywood and Beverly Hills’ glitzy Golden Triangle corridor.
Trending on Billboard
According to the complaint, the Beverly Hills home now being used by LiveOne had been privately held and occupied by a long-time owner who passed away in 2021. The property, which includes, a pool, a swimming lap lane and a guest house, was then purchased by Siamak Khakshooy and Tanaz Koshki for $6.9 million in October 2021 and rented the following December to The Revels Group, which manages artists including rapper G-Eazy.
That’s when the problems for the Kibler family began, according to the lawsuit. The Revels Group used the space as its “creative compound,” the lawsuit reads, operating music studios on the property and promoting “all-night music industry events hosted by professional DJs” on a “nightclub-quality sound system in the backyard.” After receiving multiple complaints about the house, Beverly Hills’ Code Enforcement department launched an investigation in September 2022 and ordered the company to “permanently terminate all operations,” which led to The Revels Group not renewing its lease. After The Revels Group moved out in December 2022, LiveOne moved in around March 2023.
Since taking over the property, LiveOne “has operated its music and entertainment company by engaging in recording studio activities, hosting a pre-Grammy night party on February 3, 2024, and holding other music entertainment events,” the lawsuit reads.
The Kiblers have hired private investigators to surveil the house and issue lengthy reports identifying LiveOne staffers as they enter and exit the property, even running license plate checks on cars parked near the house to determine the identities of the drivers, according to the lawsuit. Besides the occasional late-night party, the Kibler’s biggest complaint is the “large quantities of trash overflowing from the City trash and recycling bins in the alley behind The LiveOne House.”
The Kiblers are suing LiveOne and the property’s owners for violating local zoning laws, charging both with public and private nuisance, as well as infliction of emotional distress. The Kiblers are asking a judge to order LiveOne to cease all business at the house and pay a $10,000 fine for each day it operates at the house.
Billboard reached out to LiveOne for comment but did not receive a response.
The Billboard Global Music Index — a diverse collection of 20 publicly traded music companies — finished 2023 up 31.3% as Spotify’s share price alone climbed 138% thanks to cost-cutting and focus on margins. Spotify is the single-largest component of the float-adjusted index and has one of the largest market capitalizations of any music company.
The music index was outperformed by the tech-heavy Nasdaq composite, which gained 43.4% with the help of triple-digit gains from chipmaker Nvidia Corp (+239%) and Meta Platforms (+194%). But the Billboard Global Music Index exceeded some other major indexes: the S&P 500 gained 24.2%, South Korea’s KOSPI composite index grew 18.7% and the FTSE 100 improved 3.8%.
Other than Spotify, a handful of major companies had double-digit gains in 2023 that drove the index’s improvement. Universal Music Group finished the year up 14.7%. Concert promoter Live Nation rode a string of record-setting quarters to a 34.2% gain. HYBE, the increasingly diversified K-pop company, rose 34.6%. SM Entertainment, in which HYBE acquired a minority stake in March, gained 20.1%.
A handful of smaller companies also finished the year with big gains. LiveOne gained 117.4%. Reservoir Media improved 19.4%. Chinese music streamer Cloud Music improved 15.8%.
The biggest loser on the Billboard Global Music Index in 2023 was radio broadcaster iHeartMedia, which fell 56.4%. Abu Dhabi-based music streamer Anghami finished 2023 down 34.8%. After a series of large fluctuations in recent months, Anghami ended the year 69% below its high mark for 2023. Hipgnosis Songs Fund, currently undergoing a strategic review after shareholders voted against continuation in October, finished the year down 16.6%.
Sphere Entertainment Co., which split from MSG Entertainment’s live entertainment business back in April, ended 2023 down 24.4%. Most of that decline came before the company opened its flagship venue, Sphere, in Las Vegas on September 29, however. Since U2 opened the venue to widespread acclaim and earned Sphere global media coverage, the stock dropped only 8.5%.
For the week, the index rose 1.1% to 1,534.07. Fourteen of the index’s 20 stocks posted gains this week, four dropped in price and one was unchanged.
LiveOne shares rose 15.7% to $1.40 after the company announced on Friday (Dec. 29) it added 63,000 new paid memberships in December and surpassed 3.5 million total memberships, an increase of 29% year over year. iHeartMedia shares climbed 14.6% to $2.67. Anghami continued its ping-pong trajectory by finishing the week up 16.9%.
iHeartMedia shares dropped 19.6% to $2.01 this week as the company warned investors of continued softness in radio advertising dollars. Fourth quarter results “will be weaker than we originally anticipated,” said CEO Bob Pittman during Thursday’s earnings call. In October, consolidated revenue was down 8% from the prior-year period. For the fourth quarter, iHeartMedia expects consolidated revenue excluding political ad revenue to decline in the low single digits.
Still, iHeartMedia’s third-quarter results were in line with previous guidance. Revenue of $953 million was down 3.6% from the prior-year period, a bit better than the guidance of a low single-digit decrease. Adjusted earnings before interest, taxes, depreciation and amortization of $204 million was within the guidance of $195 million to $205 million.
The week’s sharp decline brought iHeartMedia’s year-to-date loss to 67.2%, far deeper than the declines of broadcast radio company Cumulus Media (-21.9%) and satellite radio company SiriusXM (-20.7%). Not only has broadcast radio suffered from weak national advertising, it lacks the high growth rates of music streaming and podcasting. PwC’s latest forecasts call for U.S. radio advertising revenues to rise just 4% from 2023 to 2027 while U.S. podcast advertising — where iHeartMedia has a large footprint — will grow 41% to $2 billion.
Next year’s elections should provide a shot in the arm, though. “As we look forward to 2024, we expect to generate significantly better free cash flow driven in part by an improving macro environment, as well as the impact of political dollars,” said CFO Rich Bressler. In 2020, the company generated $167 million in political revenues, he noted.
The Billboard Global Music Index mostly held steady this week, dropping just 0.3% to 1,390.68. Of the index’s 20 stocks, seven gained this while while 13 finished in negative territory. Most stocks had low-single-digit gains or losses and iHeartMedia was the only stock with a double-digit move in either direction.
French company Believe was the index’s greatest gainer of the week after improving 7.4% to 9.93 euros ($10.64). German concert promoter CTS Eventim, which will release third-quarter earnings on Nov. 21, gained 5.5% to 62.75 euros ($67.24). Music streaming company LiveOne gained 4.7% to $1.12. Chinese music streamer Cloud Music, which has not yet announced the date of its third-quarter earnings release, gained 3.3% to 99.50 HKD ($12.74).
Shares of Sphere Entertainment Co. dropped 1.5% to $35.95 after a roller-coaster week. Following the company’s Nov. 3 announcement that CFO Gautum Ranji had left the company, Sphere Entertainment shares dropped 9.6% to $32.97 on Monday. The share price fell an additional 4.5% to $31.87 on Wednesday following the quarterly earnings release. But Sphere Entertainment picked up momentum in the latter half of the week, gaining 12.8% over Thursday and Friday to close at $35.95.
U.S. stocks were broadly up this week despite news that consumer sentiment declined in November and expectations for future inflation reached their highest level since 2011. The Nasdaq composite rose 2.4% while the S&P 500 improved 1.3%. Many major U.S. tech stocks posted big gains. Microsoft hit an all-time high of $370.09 on Friday and finished the week at $369.67, up 4.8%. Apple rose 5.5% to $186.40. Amazon improved 3.6% to $143.56. Meta jumped 4.5% to $32.8.77. In the United Kingdom, the FTSE 100 fell 0.8%. South Korea’s KOSPI composite index gained 1.7%.
Slacker, the music streaming service owned by LiveOne, called off its planned merger with Roth CH Acquisition V Co., a special purpose acquisition company, the companies announced Monday (Oct. 30).
LiveOne CEO Robert Ellin attributed the move to a poor market climate for small companies. “Market conditions for micro-cap stocks, for stocks under $1 billion, are just decimated this year as a whole,” he says. Companies that go public through SPAC mergers also face a difficult time, he adds. A SPAC is a blank-check company created and funded for taking a private company public. SPAC funding and mergers peaked in 2021, according to SPAC Research.
The SPAC market has softened considerably since 2021. Many SPACs failed to close a deal and returned their funds to shareholders. Music Acquisition Corp. returned funds to shareholders in Dec. 2022. Liberty Media closed down its SPAC in Nov. 2022 after a fruitless search for a takeover target. A record 123 SPACs liquidated in the first half of 2023, compared to just seven in the prior-year period, and the average redemption rate — SPAC shares redeemed for full value before merging with a target company — increased in the first half of 2023, according to Kroll. “It’s a tough market to come out in,” says Ellin.
Additionally, LiveOne believes Slacker has gained in value since it agreed to merge with Roth. LiveOne previously announced it had signed a letter of intent to merge Slacker with Roth and put a pre-money valuation of $160 million on the music streamer. But on Monday, LiveOne raised its revenue guidance for Slacker to the range of $63 million to $66 million for the fiscal year ended March 31, 2024. The company expects adjusted earnings before interest, taxes, depreciation and amortization of $17 million to $19 million.
“I think it’s worth $200 million at a minimum,” says Ellin, “and probably way higher than that when you’re looking at what Tidal sold for at $400 million and change, where Deezer trades at 300 million [euros, or $317 million]. We’re the only one that’s profitable. We make money every month, every quarter, every year.”
The market currently puts a far lower value on Slacker, however. LiveOne — including Slacker — has a $92 million market capitalization. That includes an 81% stake in PodcastOne, a podcast company LiveOne spun off in September that currently has a market capitalization of $70 million. LiveOne said that prior to the spin-off, PodcastOne was valued at between $230 million and $274 million by third-party valuation firm ValueScope.
Slacker was founded in 2007 and acquired by LiveOne — then called LiveXLive Media — in 2017 for $50 million. Many of its subscribers come from a white-label service that powers other brands’ digital radio. For example, nearly every new Tesla automobile sold in the United States comes with a subscription to Tesla Radio that’s provided by Slacker and paid for by the automaker. LiveOne says it added over 300,000 new paid Tesla subscribers in the first five months of its fiscal year, a 30% year-over-year increase. The company expects to add over 800,000 new subscribers this fiscal year.
With the SPAC merger off the table, Ellin sees numerous potential avenues for Slacker. “There’s an opportunity today to roll up multiple other companies in the space,” he said during an investor call on Wednesday (Nov. 1). “We have four to five potential acquisitions in the audio business alone that would fit in very nicely with the company and be extraordinarily accretive to revenues and bottom line. We also could explore a sale or a strategic investor, including some of our current customers or investors. We also will explore a direct IPO as the markets change and fair market value for the numbers that we’ve delivered are available.”
Roth “is currently exploring opportunities with other potential merger candidates in order to complete its business combination,” according to Monday’s press release.
PodcastOne debuted its long-awaited listing Friday (Sept. 8), with officials from parent company LiveOne ringing the opening bell on the trading floor of the NASDAQ to celebrate what CEO Rob Ellin says is first ever spinoff of a minority stake in a publicly traded company. Shares of the new LiveOne subsidiary Courtside Group, better known as PodcastOne, fell 45% shortly after trading opened, dropping from $8 per share to close at $4.39.
Explore
Explore
See latest videos, charts and news
See latest videos, charts and news
The tumble came amid growing criticism of one of PodcastOne’s acquisition targets — California-based Kast Media — by major podcasters like comedian Theo Von who accused Kast of failing to pay out $4 million in advertising fees collected by Kast on behalf of its podcaster clients.
In a video viewed more than 1 million times, titled “This Man Defrauded Our Podcast,” Von alleges that Kast Media founder and CEO Colin Thomson did not pay his show This Past Weekend with Theo Von for the advertisements it sold and booked for Von’s show. Von claimed This Past Weekend eventually cut ties with Kast Media, only to later be approached by Thomson and Ellin and was told on a phone call, “If you come over to our new network PodcastOne, we’ll pay some of what you’re owed in stock,” Von said, adding “it felt like to me they’re trying to leverage our podcast and other podcasts to then make their stock do well and if that happens, then we’ll get a share of our money.”
Von told viewers he declined the offer.
Ellin addressed the Kast Media scandal on Friday during a post-market opening interview with Yahoo News. He noted that PodcastOne is no longer hiring Thomson to join his the publicly traded company, but noted he hoped to help creators hurt by the Kast Media controversy.
“We’ve bought a distressed asset called Kast Media, a very distressed, troubled asset (that) owed a lot of money to its podcasters and couldn’t really afford to pay them. And the banks pulled out. And that host pulled out. So we acquired those and have added some very serious revenues to it,” he said.
Von isn’t the only podcaster to go public about the Kast Media scandal. Pro Wrestling podcaster Jim Cornette and cohost Brian Last have detailed their own experience with Kast Media and PodcastOne in a series of at least seven podcast episodes over the last two months. Former Sirius XM host Jason Ellis has also spoken out against Kast Media in a recent viral video.
Von said he will continue pursuing Thomson for the money he is owed by Kast Media.
“You f—ed with the wrong rat, homie” Von said while a picture of Thompson aired on the screen. “You can’t get me to shut up.”
Thomson did not respond to multiple requests for comment.
Spotify led a group of high-flying streaming stocks this week by gaining 14.8% to $157.54 per share, increasing its market capitalization by nearly $4 billion to $30.7 billion. The world’s largest streaming company, which boasted 220 million subscribers as of June 30, has clawed back nearly all its losses since its share price dropped 14% […]
Streaming service Slacker is looking to become the fifth music company to go public by merging with a special purpose acquisition corporation, or SPAC — and the clock is ticking. Its owner, LiveOne, has signed a letter of intent to combine Slacker, which it estimates will have a valuation of $160 million, with Roth CH Acquisition V Co.
But like many other SPAC deals, Slacker’s merger with Roth has faced challenges. For starters, many of Roth’s shareholders have opted not to take part in the Slacker deal. Roth experienced $93 million in redemptions in the second quarter, according to its latest 10-Q filing, as shareholders opted for a $10 redemption value rather than roll the dice on a music streaming company that expects to finish 2023 with 3.75 million free and paying users. That leaves Roth with $26.4 million to contribute to Slacker once the deal is done.
To shore up support ahead of a merger, Roth entered into non-redemption agreements with shareholders representing 2 million shares. Those shareholders agreed not to redeem public shares and will receive a payment of 4 cents per share per one-month extension, according to a Roth filing with the SEC.
Starting a SPAC gives the founders a limited window to put investors’ money to good use or return the funds to shareholders. Running out of time to close a deal with Slacker, in May, Roth received shareholder approval to extend the merger deadline by up to six months. The extension ends Dec. 4 — barely more than three months away. “It seems [like a] very tight [timeline],” says Megan Penick, an attorney at Michelman & Robinson. “I mean, conceivably they could still complete it. It just seems that they must still be conducting their due diligence and coming to terms on how the deal is going to be structured.”
A SPAC effectively puts the cart before the horse: It raises money through an initial public offering (IPO) before setting about finding an appropriately sized, high-growth company to take public. (Pursuing a target before the IPO, as Digital World Acquisition Corp. did with Donald Trump’s Truth Social, is against the rules.) The target company is spared the long and costly process typically incurred when taking a company public. The SPAC founders get a stake in the post-merger company and investors benefit when the post-merger stock rises above the redemption price. The number of SPAC IPOs jumped from 55 in 2019 to 610 in 2021, according to S&P Global Market Intelligence, while money raised increased from $14 billion in 2019 to $160.8 billion in 2021.
Overall, however, SPACs have failed to live up to their lofty expectations. “Too many SPACs, not enough suitable targets,” says Penick. After 265 SPACs closed mergers in 2021, only 187 did so in 2022. And while there were 100 SPAC deals in the first half of 2023, the value of the deals amounted to just one-tenth of the deals closed in the first half of 2021, according to S&P Global.
Faced with a shortage of good candidates, many SPACs have opted to dissolve and return capital to shareholders. Music Acquisition Corporation, co-founded by former Geffen Records president Neil Jacobson, dissolved in 2022 after raising $230 million in a 2021 IPO. Liberty Media did the same with its SPAC, Liberty Media Acquisition Corp., in November, more than two months before the deadline to complete a deal or return to shareholders the $575 million it raised in an IPO. “Frankly, getting an extension wasn’t worth it, given we had nothing on the table that was attractive enough for us to take [a] look,” said Liberty Media president and CEO Greg Maffei.
Perhaps the biggest problem with SPACs is they haven’t been a good investment for the original investors. Abu Dhabi-based music streamer Anghami has fallen 91% to 89 cents since merging with Vista Media Acquisition Corp. in February 2022. French music streamer Deezer has fallen 76% to 2.06 euros since merging with IPO2 in July 2022. And New York-based publisher and label Reservoir Media has fallen 43% to $5.45 since merging with Roth CH Acquisition II — the same team behind the SPAC that intends to merge with Slacker — in July 2021. All three stocks had a $10/10 euro IPO price.
Worse yet, Alliance Entertainment ended up trading over the counter in February after a high number of redemptions left its partner SPAC, Adara Acquisition Corp, with just $1.7 million to contribute to the merged company — probably not enough to cover investment banking and legal fees for the transaction. That also left Alliance short of the New York Stock Exchange’s float requirements. “The issue of having enough market volume and enough market cap to remain a listed security is a challenge that a lot of SPACs run into,” says Michael Poster, an attorney at Michelman & Robinson. Alliance has dropped 75% to $2.02 since it merged with Adara in February.
Slacker didn’t respond to a request for comment on the deal.