Music Stocks

07 Jul 2023

Sphere Entertainment Stock Gains 23% As Hype Builds Around Namesake Venue

Seeing is believing for some investors in Sphere Entertainment Co., the developer of the new state-of-the-art venue, The Sphere, in Las Vegas.

Shares of Sphere Entertainment soared 22.7% this week after the world saw the first videos of the dazzling display created by the 580,000 square feet of programmable LED “pucks” on Exosphere, the exterior of the 366-foot tall, spherical venue. The mesmerizing light show received heavy media coverage — from CNN, NPR, USA Today, The Guardian and Daily Mail, among many others — and was shared widely on social media. The buzz helped Sphere Entertainment’s market cap grow to $919 million — a more than $170 million increase.

U2 launches The Sphere on Sept. 29 with a 25-date residency that runs through Dec. 16. As of Friday, the Sept. 29 show is sold out, and the only available tickets for the next two dates cost $501 apiece. The Sphere’s other programming is Postcards from Earth, an immersive experience created by filmmaker Darren Aronofsky that’s meant to showcase the venue’s technological capabilities.

Sphere Entertainment was one of eight stocks in Billboard’s Global Music Index to post gains this week. The index improved 1%, beating the S&P 500 (down 1.2%), Nasdaq composite (-0.9%), the U.K.’s FTSE 100 (down 1.5%) and South Korea’s KOSPI composite index (down 3.6%). Stocks fell on Friday (July 7) as investors feared that the Labor Department’s June jobs report — which showed wages were stronger than expected — might increase the likelihood the Federal Reserve will resume interest rate increases to cool the economy and ward off inflation.

Two radio stocks were also big winners this week. Shares of iHeartMedia and Cumulus Media increased 9.3% and 8.5%, respectively. Although both stocks are down sharply in 2023 — iHeartMedia has lost 35.1%, Cumulus is off 28.3% — both have experienced a string of successful weeks. Shares of iHeartMedia have gained 66.5% in the last six weeks. Cumulus Media shares have improved 37.8% over that span.

Warner Music Group, the index’s only other stock with a high single-digit gain this week, improved 7.4% to $28.01. That pared WMG’s year-to-date loss to 20%.

23 Jun 2023

Cumulus Media a Rare Winner in Off Week for Music Stocks

Shares of Cumulus Media gained 9.7% this week, the leading stock in the Billboard Global Music Index and one of only four stocks in the 21-company index to end in positive territory Friday (June 23).

Overall, the Billboard Global Music Index declined 3.5% to 1,287.41 — more than double the 1.4% declines of the S&P 500 and Nasdaq. Music stocks were more in line with the Nasdaq when the overpowering effects of a small number of tech companies are removed, however. That’s because a few powerhouses — such as Microsoft, Apple, Alphabet and Amazon — often account for a large fraction of the Nasdaq’s gains. To that point, QQQE, an exchange-traded fund that gives equal weight to 100 Nasdaq stocks, declined 2.9% this week.

In the United Kingdom, the FTSE 100 declined 2.4%. South Korea’s KOSPI index fell 2.1%. Central banks in England, Turkey and Norway raised interest rates this week. Investors can reasonably expect more rates hikes in the United States, too. Federal Reserve chairman Jerome Powell said on Wednesday the central bank may continue to raise rates — there have been 10 since March 2022 — but “to do so at a more moderate pace.” When central banks raise interest rates, stocks tend to fall because businesses and consumers are expected to cut back on spending and higher rates make bonds relatively more attractive to stock returns.

Cumulus Media improved to $3.40 a week and a half after the company announced it will sell about 1.75 million Class A common shares — nearly 10% of outstanding shares — at $3.25 per share in a modified Dutch auction that closed on June 9. While the sale will gross about $5.7 million, not including fees and expenses, the final result was well below the company’s goal to sell up to $10 million of shares as part of a previously announced $50 million share repurchase plan.

Shares of French music streaming company Deezer gained 3.6% to 2.32 euros ($2.54), bringing the stock’s year-to-date loss to 20.5%. U.S. streaming company LiveOne gained 3.3% to $1.58. Year-to-date, LiveOne has gained 145.3%. The only other company with a week-over-week improvement was South Korea’s HYBE, which improved 1.2% to 301,000 KRW ($236.91).

The other three Korean music companies declined this week: SM Entertainment and YG Entertainment each fell 5.6% and JYP Entertainment dropped 3.5%. Still, K-pop has been a resounding success for investors in 2023. Led by JYP Entertainment’s 93.7% year-to-date gain, the four Korean companies’ stocks have risen an average of TK% in 2023.

One company, Anghami, was unchanged and the index’s other 16 stocks were in negative territory this week. MSG Entertainment had the Billboard Global Music Index’s largest decline after dropping 17.1%. Sphere Entertainment Co., which spun off MSG Entertainment in April, intends to sell part of its 33% stake in MSG Entertainment. The news dropped the live entertainment company’s share price 12.1% on Wednesday. At Friday’s closing price, Sphere Entertainment’s sale of 5.25 million shares would gross about $170 million that could help fund the state-of-the-art Sphere at The Venetian Resort in Las Vegas that’s set to open in September.

16 Jun 2023

SM Entertainment Leads Music Stocks’ Best Week in Seven Months

Shares of SM Entertainment gained 15.3% this week, making the K-pop company the greatest gainer among the 21 music stocks in the Billboard Global Music Index. Although the company wasn’t the subject of any significant news items that typically affect share prices — earnings, investments or partnerships — its shares nonetheless rose to 117,600 KRW ($92.07), bringing the year-to-date gain to 53.3%.

It’s not just SM Entertainment, though. K-pop is booming in 2023. Shares of the index’s other South Korean music company, HYBE, gained 6.1% this week and have gained 71.5% in 2023. Outside the index, JYP Entertainment and YG Entertainment have gained 100.6% and 88.4%, respectively, year to date.

With 16 of its 21 stocks in positive territory this week, the Billboard Global Music Index improved 5% to 1,334.28, its best one-week performance since November. The biggest contributors to the index’s value posted strong single-digit gains. Spotify improved 6.3% to $159.99, Universal Music Group gained 3.8% to 20.16 euros ($22.11) and Warner Music Group jumped 9.3% to $27.16. Meanwhile, Live Nation gained 7.2% to $90.18 and on Thursday (June 15) closed above $90 for the first time since Sept. 15.

Two other stocks had double-digit gains this week. Streaming company LiveOne added 13.3% to $1.53, bringing its year-to-date gain to 137.6%, while Sphere Entertainment Co. climbed 10.9% to $29.29. Since Sphere separated from MSG Entertainment’s concert promotion business on April 20, its shares have gone up more than 14%. On Sept. 29, U2 will launch the MSG Sphere at the Venetian with a residency that extends through Dec. 16.

While stocks were generally up this week, music stocks fared better than the major indexes. The S&P 500 gained 2.6% to 4,409.59, its best week since March. The Nasdaq composite improved 3.2% to 13,689.57, also marking its best week since March. Outside the United States, South Korea’s Kospi index dropped 0.6% to 2,625.79, while the FTSE 100 in the U.K. gained 1.1% to 7,642.72.

German promoter and ticketing company CTS Eventim had the week’s largest decline at 18.2%, making it the only music stock on the index with a double-digit loss. As Billboard reported on Wednesday, the German company’s share price fell precipitously in the two days following a critical segment on the German public television show ZDF Magazin Royale.

14 Jun 2023

CTS Eventim’s Market Value Fell by Over $1B Following German Satirist’s Critiques

German television personality Jan Böhmermann appears to have single-handedly knocked more than 1 billion euros ($1.15 billion) from the market value of CTS Eventim after he criticized the concert promoter and ticketing company on his late-night talk show ZDF Magazin Royale on German public television on Friday.

According to various media reports, Böhmermann, in a 23-minute news-styled feature, bemoaned the company’s dominant market position in promotion and ticketing and a lack of transparency about the fees added to tickets. “Eventim is practically the German event industry,” the satirist said (as translated to English) He singled out the company’s re-sale platform, fanSale, which allows ticket holders to sell tickets at a premium to their face values. “Why fight the black market when you can earn money yourself?” he asked.

Böhmermann also said that CTS Eventim received 15 million euros ($16 million) of COVID-19 economic aid from the Federal Government Commissioner for Culture and the Media. In total, the company received 272 million euros ($295 million) in economic aid from Germany and elsewhere from 2020 to 2022, according to the company’s financial statements. He noted that a director, Juliane Schulenberg, is the daughter of CTS Eventim founder and chairman Klaus-Peter Schulenberg. She has been a member of the CTS Eventim’s supervisory board since May 2016, according to the company’s website.

“Unfortunately, many facts are twisted and not the truth,” a CTS Eventim spokesperson told Billboard in an email. While Böhmermann suggested Juliane Schulenberg influenced COVID-19 aid received by CTS Eventim, the company’s spokesperson says she “had no professional position in this regard and therefore no influence.”

ZDF Magazin Royale made a significant impact when the market opened after the weekend. Shares of CTS Eventim fell 8.9% on Monday and another 7.5% on Tuesday, bringing the two-day decline to 15.7% — a 1.07 billion euros ($1.15 billion) decline in market capitalization. After a 0.8% gain on Wednesday, shares of CTS Eventim were up 1.3% year to date.

CTS Eventim is the largest concert promotion and ticketing company in Europe and had revenues of 1.9 billion euros ($2 billion) and sold 69 million tickets online in 2022. Its portfolio includes EDM promoter ALDA Germany; the Rock am Ring and Rock im Park festivals; numerous ticketing brands; EMC Presents, a partnership with U.S. tour promoter and producer Michael Cohl; and Eventim Live Asia, a partnership with former Live Nation executive Jason Miller based in Singapore.

U.S. audiences will recall a similar segment about the country’s dominant ticketing company, Ticketmaster, by comedian John Oliver on his HBO show Last Week Tonight in 2022. Oliver touched on the same themes brought up by Böhmermann: market dominance, rising ticket fees and ownership of a secondary market that profits from in-demand tickets’ re-sale values. Oliver had a negligible effect, however, as the share price of Ticketmaster’s parent company, Live Nation, dropped just 0.5% the day after the episode aired. A chance of government intervention has given Live Nation investors pause on numerous occasions, however, such as politicians’ criticism of Ticketmaster’s Taylor Swift pre-sale in November and a 2018 New York Times article about Live Nation’s alleged anticompetitive business practices.

Just as Live Nation and Ticketmaster are under constant scrutiny in the U.S., CTS Eventim routinely falls into the crosshairs of consumer advocates and government regulators. In February, more than 1,500 consumers in Germany had joined a model declaratory judgment against CTS Eventim filed by the Federation of German Consumer Organizations. The consumer advocacy group alleges the company did not refund ticketing fees for cancelled events. In 2018, CTS Eventim’s share price fell as much as 10% after Germany’s Federal Supreme Court ruled the fees charged for printing out tickets ordered online were illegal. Also in 2018, the German Federal Cartel Office banned CTS Eventim from having exclusive ticketing agreements with promoters and box offices. In 2017, the Cartel Office blocked CTS Eventim from acquiring promoter and booking agency Four Artists, which a German court upheld the following year.

09 Jun 2023

iHeartMedia Leads Music Stocks’ Gains for Second Straight Week

The Billboard Global Music Index improved 1.8% to 1,270.57 in the week ending June 9, marking gains in successive weeks and four out of the last six weeks. iHeartMedia was the index leader for the second straight week. Shares of the radio company were up 13.5% to $3.54 a week after rising 30.5%. 

Thirteen of the 21 stocks in the index posted gains over the week. LiveOne improved 9.8% to $1.35 and Sphere Entertainment Co. rose 8.1% to $26.40. One company, French company Believe, was unchanged and seven companies posted losses. Most stocks that lost ground dropped only 1%, however. Madison Square Garden Entertainment had the largest loss of the week after falling 4.9% to $38.13. 

Stocks were broadly up as investors await a Federal Reserve policy meeting next week. The S&P 500 rose 0.4% to 4,298.86, marking its fourth straight week of growth. The Nasdaq gained 0.1% to 13,259.14. The U.K.’s FTSE 100 index declined 0.6% to 7,562.36. South Korea’s KOSPI index improved 1.5% to 2,641.16. One encouraging sign this week came from the CBOE Volatility Index, commonly referred to as the “fear index.” A measurement of 30-day expected volatility of the U.S. stock market, the CBOE Volatility Index fell to 13.50 on Friday (June 9), its lowest level since before the COVID-19 pandemic. 

Year-to-date, the Billboard Global Music Index’s performance has improved 8.8% and posted gains in 13 of 23 weeks. Spotify’s 90.6% increase through June 9 has been the largest single contributor to the index’s growth. The year-to-date gains of two K-pop companies also stand out: HYBE is up 61.7% and SM Entertainment has improved 33%. Music promoters have also fared well. Live Nation shares have risen 20.7% and Germany’s CTS Eventim is up 19.1%. 

02 Jun 2023

iHeartMedia’s 30% Gain Leads Music Stocks This Week Amid Robust U.S. Jobs Report

Shares of iHeartMedia jumped 30.5% to $3.12 this week, making the radio giant the best-performing stock on the Billboard Global Music Index. The company gained 25.3% on Friday (June 2) without any clear signal — such as an SEC filing or earnings release — to drive such a sharp movement. On Thursday, CEO Bob Pittman told The New York Post that “radio is as strong as ever” and is not in competition with streaming services like Spotify. “The consumer uses us both,” he said. iHeartMedia’s share price is down 49.1% year to date.

The Billboard Global Music Index increased 1.3% to 12,47.74 overall this week, as 11 of the index’s 21 stocks finished in positive territory. Korean music company HYBE was unchanged, while the remaining nine stocks posted losses between 0.9% and 4.2%. The index has gained 6.8% year to date. 

Stocks closed the week on high notes following a U.S. Bureau of Labor Statistics jobs report that showed non-farm payroll employment increased by 339,000 in May. Although the music industry is experiencing a rare series of layoffs and notable tech companies like Meta continue to downsize, the jobs market has remained strong in the face of inflation and higher borrowing costs following a year of interest rate hikes by the Federal Reserve.

The S&P 500 gained 1.5% on Friday, bringing its one-week increase to 1.8%. The Nasdaq composite gained 1.1% on Friday and closed 2.0% higher on the week. Overseas, the United Kingdom’s FTSE 100 index fell 0.3% this week while Korea’s KOSPI index improved 1.7%.

Madison Square Garden Entertainment (MSGE) was the only other stock on the Billboard Global Music Index that showed a double-digit gain, with shares gaining 14.4% to finish at $40.09. On Wednesday, Macquarie initiated coverage of MSGE with a $43 price target and an “outperform” rating; speaking with the TD Ameritrade Network on Friday, Macquarie analyst Paul Golding noted the company’s “high-quality assets that are very well known in the largest market in the country” and “desirable assets” for concerts and tours. 

Outside of the Billboard Global Music Index, radio company Townsquare gained 16.9% this week, bringing the company’s year-to-date improvement to 44.7% despite a soft advertising market that has hurt most radio stocks. K-pop company JYP Entertainment, home to Stray Kids and Twice, steadily rose throughout the week to close at 128,700 KRW ($98.53) on Friday, up 13.2%, for a year-to-date gain of 89.8%. JYP announced on Wednesday that it expanded its partnership with Imperial and Republic Records to help market and promote its music in the United States.

26 May 2023

Music Stocks Down as Markets Show Optimism for U.S. Debt-Ceiling Deal

Stock markets ended the week on a positive note as investors showed optimism believing that Congress can negotiate a deal to increase the nation’s debt limit and avoid a historic default. The S&P 500 increased 1.3% to $4,205.45, up 0.3% on the week, while the Nasdaq composite climbed 2.2% on Friday (May 26) to finish the week up 2.5% — its fifth straight week of gains. South Korea’s KOSPI index improved 0.8% to 2,558.81 while the U.K.’s FTSE 1000 dropped 1.7% to 7,627.20.

The end-of-the-week rally didn’t get music stocks into positive territory, however. The Billboard Global Stock Index fell 1.9% this week as 15 of the index’s 21 stocks lost ground. Most of the companies’ performances fell into a narrow band of gains and losses in the low single digits. Two companies had double-digit losses: iHeartMedia fell 10.5% to $2.39 and has lost 61% year to date as the radio business experiences a soft advertising market. LiveOne, which announced on Tuesday it will acquire certain assets of podcast network Kast Media, dropped 15.2% to $1.28.

The index’s top performer was Round Hill Music Royalty Fund Ltd., which gained 3.3% to 0.775 pounds ($0.96). Madison Square Garden Entertainment and Sphere Entertainment Co. gained 2.2% and 1.7%, respectively. The two companies were under the same roof until Madison Square Garden Entertainment’s concert promotion business was spun off from the remainder of the company on April 21. Sphere Entertainment Co., which includes the Sphere venue set to open in Las Vegas on Sept. 29 with a U2 residency, declined 3.4% to $24.02 on Friday as Morgan Stanley set a post-spinoff price target of $26 per share.

K-pop stocks were uncharacteristically quiet this week. Shares of HYBE fell 3.9% to 270,000 KRW ($204.02) despite the company announcing on Wednesday its music will be available on Tencent Music Entertainment’s streaming platforms in China. SM Entertainment declined 2.6% to 104,800 KRW ($79.19). After strong quarterly earnings boosted YG Entertainment and JYP Entertainment last week, both stocks were in line with their peers this week: YG Entertainment was flat at 92,000 KRW ($69.52) and JYP Entertainment dropped 1.7% to 113,700 KRW ($85.91). Still, K-pop stocks are arguably music’s bright spot in 2023. Year-to-date, the four companies’ stock have gained an average of 67.4%.

19 May 2023

Concert Promotion Stocks Are the Biggest Gainers on This Week’s Billboard Global Music Index

It was a good week for music stocks overall and an even better week for concert promoters, who made the biggest gains on the Billboard Global Music Index ahead of the blockbuster summer touring season.

The index rose 4.4% to 1,256.06 this week, with 15 of the 21 stocks ending in positive territory. It was led by concert promoter Madison Square Garden Entertainment’s (MSGE) 19.4% gain amidst multiple news items that influenced the share price. On Wednesday (May 17), Guggenheim initiated coverage of MSGE with a buy rating, while a report claimed that MSG Entertainment may sell the theater at Madison Square Garden for about $1 billion. On Thursday, the company released first-quarter results that showed a 4% increase in revenue to $201 million, though the company’s executives did not comment on the report during Thursday’s earnings call.

Shares of German promoter CTS Eventim also made big gains, rising 9.2% to 64.30 euros ($68.61). On Thursday, the company’s first-quarter earnings showed a 163% revenue jump to 366.2 million euros ($396 million) — beating pre-pandemic levels from the first quarter of 2019 by 29.5%. Year-to-date, CTS Eventim has sold 18 million tickets online, a 58% increase from the prior-year period. Meanwhile, Live Nation, the world’s largest concert promoter, improved 8.4% to $84.73 and is now up 21.5% year to date. Sphere Entertainment Co., which spun off MSG Entertainment in April, improved 6.1% to $23.61.

The S&P 500 improved 1.6% to 4,191.98 and the Nasdaq composite rose 3% to 12,657.90. The U.K.’s FTSE 100 index was unchanged at 7,756.87, while South Korea’s KOSPI composite index rose 2.5% to 2,537.79.

K-pop companies continued their hot streak this week. Two companies not in the Billboard Global Music Index, JYP Entertainment and YG Entertainment, gained 22.7% and 17.8%, respectively. Year-to-date, shares of JYP Entertainment, home to Stray Kids and Twice, have gained 70.6%. Shares of YG Entertainment, whose roster includes recent Coachella headliner Blackpink, are up 109.8% in 2023. Shares of HYBE dropped slightly by 0.4% but have gained 62% year to date. Likewise, shares of SM Entertainment gained only 1.1% this week but have grown 40% this year.

12 May 2023

Cumulus Media’s 19% Jump Leads the Billboard Global Music Stock Index

Cumulus Media’s share price climbed 11.9% to $3.30 on Friday (May 12) after the company announced it commenced a “modified Dutch auction” tender offer to purchase up to $10 million of shares of its common stock at up to $3.25 per share. That news led to a 19.1% improvement this week and made Cumulus, the third-largest radio company in the U.S. by revenue, the week’s top performer on the Billboard Global Music Index.

Radio companies have suffered from an advertising slowdown since the second half of 2022. Two weeks ago, Cumulus CEO Mary Berner cited “considerable macro-driven weakness in the national advertising market” when the company announced its first-quarter revenue declined 11.4% to $205.7 million and adjusted earnings before interest, taxes, depreciation and amortization fell 66.9% to $10.3 million. To shore up its bottom line and share price, which has fallen 46.9% year to date, Cumulus has cut costs — it also announced an additional $10 million of annualized savings — and retired debt at a discount. The Dutch auction is part of its previously announced $50 million share repurchase program and is “is consistent with its goal of maximizing shareholder value,” the company said in a statement.

The Billboard Global Music Index, a composite of stocks of 21 music companies across the global music industry, declined 2.8% to 1,203.04 last week. Nine of the index’s stocks were in positive territory, 10 stocks declined and one stock was unchanged. Year-to-date, the index has gained 3.0%.

Sphere Entertainment Co. declined 28.9% this week after the company disclosed on Wednesday that construction costs for the state-of-the-art venue in Las Vegas had increased $125 million to $2.3 billion. Sphere blamed the increase on the “overall complexity of the project” and noted it had made “significant progress” towards completing the structure before U2’s inaugural performance on Sept. 29.

The stock market in general performed better than the Billboard Global Music Index. The S&P 500 and Dow Jones Industrial Average declined 0.3% and 1.1%, respectively. The Nasdaq composite index improved 0.4%. In the U.K., the FTSE 100 index dropped 0.3%. Korea’s KOSPI composite index fell 1.0%.

07 Apr 2023

HYBE Leads Music Stocks This Week, Posting 15% Gain After Jimin Chart Success

HYBE shares rocketed up 14.9% this week after the K-pop company reached No. 1 on the Billboard Hot 100 with “Like Crazy” by Jimin, a member of the group BTS. Investors could also rejoice that Jimin’s album, FACE, debuted at No. 2 on the Billboard 200. HYBE shares spiked 7.5% on Thursday (April 5) following Jimin’s U.S. chart success and rose another 5.9% on Friday, closing at 217,000 won ($164.85).

“Like Crazy” is an encouraging success for HYBE’s Big Hit Music imprint and the first track by a BTS member’s solo project to top the Hot 100. In fact, Jimin is the first South Korean solo artist with a No. 1 hit on the chart in the U.S. That’s good news for a company that will be without its biggest act for the foreseeable future and which needs to create additional chart successes outside of its home market. News of BTS’s hiatus sent HYBE’s share price down TK% from June TK to TK. Since then, HYBE has reached No. 51 with JIN’s “The Astronaut” and No. 30 with Jimin’s “Set Me Free, Pt. 2.” It has had more success outside of BTS members’ solo projects. Tomorrow X Together’s The Name Chapter: Temptation (EP) reached No. 1 on the Billboard 200 while Seventeen reached No. 4 on the chart with 4th Album Repackage: Sector 17.

HYBE’s share price is up 25.1% year to date.

HYBE was the only stock in the Billboard Global Music Index to see a double-digit increase this week and one of just eight companies to finish in positive territory. Overall, the 20-company index declined 3.1% to 1,224.34 this week. (Year to date, the Billboard Global Music Index is up 4.8%.) On Wall Street, the S&P 500 declined 0.1% to 4,105.02 while the Nasdaq composite dropped 1.1% to 12,087.96.

The index’s most valuable company, Universal Music Group, declined 8.2% to 21.40 euros ($23.53) and is down 5% year to date. Spotify, the second-largest contributor to the index, declined just 0.9% to $132.48 and is up 61% year to date.