Music Stocks
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Abu Dhabi-based music streamer Anghami led all music stocks this week after gaining 17.6% to $0.82. On Thursday, the company announced through an SEC filing it had received a written notification from the Nasdaq Stock Market regarding its closing share price being below $1.00 for the previous 30 days. The Nasdaq gives companies 180 days to regain compliance or face de-listing from the exchange.
The warning appeared to spur a 16.5% gain on Thursday as investors saw signs the share price won’t remain under $1. In its SEC filing, Anghami stated if the share price remains under the $1 threshold it will “consider available options to cure the deficiency,” including a reverse share split (which would increase the share price by reducing the number of shares outstanding while the market capitalization remains unchanged).
SiriusXM gained 5.7% on Friday (Oct. 13) and finished the week up 11.8%. Its $4.85 closing price was the highest for the satellite radio company since Aug. 9. The typically steady stock has fallen 17% this year as self-pay satellite radio subscribers stagnated at or around 32 million for eight straight quarters. SiriusXM will host a Nov. 8 presentation to unveil a new streaming app and preview upcoming in-car innovations and new programming.
The 21-stock Billboard Global Music Index fell 1.3% to 1,355.65 this week as 13 stocks were in negative territory and only eight stocks gained ground. Year to date, the index has gained 16.1%. Led by SiriusXM’s gain and a 7.6% increase from Cumulus Media, the index’s three radio stocks had an average improvement of 5.5%. Eight record labels and publishers had an average weekly gain of 0.3%. HYBE improved 6.8% while Believe climbed 3.6% and Universal Music Group added 0.6%. Streaming companies were, on average, flat this week.
Live music stocks dropped an average of 4.8%. Shares of Sphere Entertainment Co. dropped 11.1%, effectively offsetting the 11% gain on Oct. 2 following U2’s debut performances at Sphere in Las Vegas. Live Nation dropped 3.9%, MSG Entertainment fell 3.5% and CTS Eventim shares fell 0.7%. If investors are curious what’s next for Sphere Entertainment, clues comes from an interview published Thursday. Executive chairman and CEO James Dolan said the company is “actively pursuing other markets” and “has six different kinds of spheres down to a 3,000-seater.” A Las Vegas-style Sphere may not work in London, where according to reports residents are concerned about the location and light pollution that could arise from a massive external display similar to the Las Vegas venue.
Music stocks underperformed numerous indexes. In the United States, the S&P 500 gained 0.1% and the Nasdaq composite fell 0.3%. In the United Kingdom, the FTSE 100 gained 1.4%. South Korea’s KOSPI composite index rose 2%.
Stocks faded after the release of consumer sentiment data for October by the University of Michigan showed a decline from September based on “a substantial increase” in concerns about inflation. Expectations for inflation in one year rose from 3.2% in September to 3.8% this month. That’s the highest mark since May 2023 and substantially above the 2.3% to 3% range seen in the two years before the pandemic.
Also a factor in stock prices, the U.S. Federal Reserve expects to raise interest rates one more time, according to minutes released from its September policy meeting. Interest rates have an inverse relationship with equity prices. Higher interest rates make borrowing more expensive and cut down on corporate profits.
Live Nation, Sphere Entertainment Co. and CTS Eventim were the top three music stocks this week amidst news that consumers continue to spend despite nagging inflation and a resumption of U.S. student loan payments for millions of borrowers. Live Nation shares rose 6% to $88.00, narrowly beating Sphere Entertainment’s 5.9% gain to $39.35. German promoter and ticketing company CTS Eventim jumped 4.7% to 56.40 euros ($59.79).
Despite some economic warning signs, consumers continue to spend on experiences such as concerts, travel and luxury goods. Americans spent 5.8% more in August than in the prior-year period, according to the National Retail Federation. Many consumers are now facing the resumption of monthly student loan payments after a long grace period caused by the COVID-19 pandemic — it was one factor in retail giant Target cutting its profit forecasts in August. Gas prices are on the rise in much of the United States. Still, concert ticket sales are booming and airlines reported strong revenue this summer. More encouraging news came from Friday’s U.S. jobs report from the Bureau of Labor Statistics: Non-farm employment rose by 336,000 and the unemployment rate was unchanged at 3.8%.
It was a big week for Sphere Entertainment as its shares climbed 11.1% on Monday following U2’s opening weekend at Sphere in Las Vegas. The rave reviews and mind-blowing videos pushed Sphere Entertainment’s stock price as high as $43.59, up 17.3%, before falling 5% to $39.23 at the end of the trading day. Sphere Entertainment didn’t maintain the momentum, however, and dropped 5% from Tuesday to Friday. Still, Sphere’s opening provided a boost to the company and validated Sphere Entertainment CEO James Dolan’s vision to create a new category of venue built specifically for music. Now, investors will likely consider how many other artists have the necessarily large and fervent fan bases to book Sphere residencies and build productions worthy of Dolan’s $2.3 billion gamble.
The 21-stock Billboard Global Music Index improved 2.1% to 1,373.62 as 12 stocks finished the week in positive territory. The index’s four live music companies had an average gain of 4.3%. Six streaming companies had an average gain of 1.6% while eight companies in recorded music and publishing dropped an average of 0.9% and three radio companies fell an average of 7.6%.
Music outperformed many indexes as stocks had a mixed week. In the United States, the S&P 500 improved 0.8% and the tech-heavy Nasdaq composite improved 1.8%. In the United Kingdom, the FTSE 100 fell 1.5%. South Korea’s KOSPI composite index fell 2.3%.
Another of the index’s more prominent components, Warner Music Group (WMG), rose 4.5% to $32.80, the fourth-largest gain of the week. WMG closed its year-to-date deficit to 6.3% after gaining 2.8% on Friday and pushing its market capitalization to nearly $17 billion. Universal Music Group improved less than 0.1%. Two K-pop companies, HYBE and SM Entertainment, fell 3.8% and 1.9%, respectively.
Spotify, a major player on the index with a $31.3 billion market capitalization, improved 3.5% to $160.07 and took its year-to-date gain to 102.7%. Spotify announced on Wednesday that it’s giving subscribers in the United Kingdom and Australia up to 15 hours of audiobook streaming time per month; the allotment will roll out to U.S. subscribers later this year. Audiobooks are an integral part of Spotify’s plans to become a one-stop audio destination. The news wasn’t cause for concern that Spotify will incur a previously undisclosed expense from this streaming allotment. Guggenheim analysts wrote in a report on Tuesday that they don’t expect audiobook streaming to add to expenses and that Spotify likely built those costs into its latest guidance (which is 26% gross margin and a $45 million operating loss in the third quarter).
Three radio companies were among the four worst-performing music stocks of the week. iHeartMedia shares fell 14.2% to $2.71, bringing the year-to-date loss to 55.8%. Cumulus Media shares dropped 4.5% and SiriusXM shares fell 4.0%. The other notable decline of the week came from Hipgnosis Songs Fund, which fell a further 7.1% to 0.745 GBP ($0.91) in the wake of its Sept. 14 announcement that it will sell $465 million in catalog assets to help lift its struggling share price.
Sphere Entertainment Co. shares rose 11.1% to $41.99 on Monday (Oct. 2) — and reached a high of $43.59, up 17.3% from Friday’s closing price — after the world got its first glimpses of the revolutionary concert venue over the weekend. The $2.3 billion venue opened on Friday (Sept. 29) with the first of 25 […]
SiriusXM shares rose 11.1% to $4.52 this week following an offer from Liberty Media on Tuesday (Sept. 26) to combine its tracking stock, The Liberty SiriusXM Group, with SiriusXM’s stock to form a new public company.
Liberty Media, which owns 83% of SiriusXM’s outstanding shares, proposed a complicated transaction that would “provide value to all shareholders with a more flexible and attractive currency” in the newly formed SiriusXM stock, Liberty Media president/CEO Greg Maffei said in a statement. SiriusXM said in a statement that a special committee of its board of directors is evaluating the proposal and provided no assurance a deal would eventually happen.
The effect appeared to be a short squeeze — albeit one smaller than the instance that inflated SiriusXM’s share price by 49% in one week in July. Because SiriusXM shares are heavily shorted and have a small float, sudden demand for the stock can create large price fluctuations. SiriusXM shares rose 15% on Thursday (Sept. 28) alone, while shares of The Liberty SiriusXM Group tracking stock finished the week up 13.4%.
While overall stocks were mixed this week, music stocks performed well. The 21-stock Billboard Global Music Index improved 1.1% to 1,344.99, better than the 0.1% gain eked out by the tech-heavy Nasdaq composite and easily besting the S&P 500’s 1.3% loss. In the United Kingdom, the FTSE 100 fell 1%, while South Korea’s KOSPI composite index dropped 1.7%. Eleven of the Billboard Global Music Index’s 21 stocks finished the week in positive territory, eight lost ground and two were unchanged.
Helped by Deezer’s double-digit improvement, streaming stocks had an average gain of 3.1%. Chinese music streamers Cloud Music and Tencent Music Entertainment gained 6.5% and 1.3%, respectively. Spotify shares dropped 2.1% to $154.63 but have gained 95.9% year to date. LiveOne shares fell 8.6% to $0.96, marking its third successive weekly loss since spinning off its PodcastOne division. This week, Billboard reported that LiveOne took out a high-interest loan to lure UFC fighter-turned-podcaster Brendan Schaub after Kast Media failed to pay him advertising money. LiveOne agreed to acquire Kast Media in May and offered Schaub and other podcasters settlements that included a mix of cash, promissory notes and PodcastOne stock.
Music’s greatest gainer this week was French streaming company Deezer. Despite there being no news — neither a press release nor a regulatory filing — that normally leads to such a substantial change, Deezer shares rose 21.8% to 2.735 euros ($2.90), including a 14.8% gain on Thursday with one of the highest trading volumes since the company went public in September 2022. Nothing indicated the company has substantially improved its earnings outlook in recent days, but Deezer had been in the news prior to this week. Three weeks ago, Deezer announced a partnership with Universal Music Group to create a new system for calculating artist royalties; and last week, the company revealed plans to increase subscription prices for new individual and family plans in the United Kingdom, Spain, Italy, the Netherlands and its largest market, France.
Live Nation shares rose 4.1% to $83.05 following news the company will help developing artists by providing a financial stipend and eliminating fees charged on merchandise sales at a number of its owned and operated clubs in the United States. Although the move will cost Live Nation money, it also comes with some strategic advantages, according to LightShed Partners analyst Brandon Ross. The decision is “great for Live Nation because it actually throws up another barrier to entry,” Ross said in the Friday (Sept. 29) episode of the LightShed podcast. “Artists are going to want to play your venue where the economics for them are better rather than somebody else’s venue.”
Shares of YG Entertainment plummeted 16.3% this week amidst speculation the agency has not renewed the contracts of the members of girl group BLACKPINK. Following a spate of reports out of South Korea, the company’s share price dropped 13.3% on Thursday (Sept. 21) and another 4.1% on Friday (Sept. 22).
On Thursday, Korean news outlet Daily Sports Seoul reported that three members of BLACKPINK — Jennie, Jisoo and Lisa — will leave YG Entertainment and spend just six months out of the year as part of the group. In response to that report and the flurry of media attention that followed, YG Entertainment issued a brief statement: “Currently, BLACKPINK’s contract renewal has not been confirmed and is being discussed.”
BLACKPINK became the first K-pop girl group to play Coachella in 2019 and headlined the festival in 2023. The quartet was also the first K-pop girl group — and the third K-pop group overall — to top the Billboard 200, with its 2022 album, Born Pink.
A week ago, YG Entertainment’s share price was up 80.8% year to date and was outpacing its K-pop competitors. Following the BLACKPINK news, shares of YG Entertainment fell to 130,300 KRW ($97.56), dropping its year-to-date gain to 51.4%. That put YG Entertainment below SM Entertainment’s 69.9% year-to-date gain and JYP Entertainment’s 55.6% improvement.
Overall, the 21-stock Billboard Global Music Index fell 1.9% to 1,330.12 this week, lowering its year-to-date gain to 13.9%. Eleven stocks ended the week in negative territory and two were unchanged. Of the eight stocks that finished in positive territory, only Cumulus Media, which gained 7.9% to $4.80, appreciated more than 3%.
Music stocks outperformed some major indexes, though. In the United States, the S&P 500 dropped 2.4% to 4,345.64 and the Nasdaq composite fell 3.6% to 13,211.81. Overseas, the United Kingdom’s FTSE 100 fell 0.4% to 7,683.91 while South Korea’s KOSPI composite index declined 3.6% to 2,508.13.
Led by Cumulus Media’s 7.9% gain, the three radio companies in the index had an average gain of 3.8% — the only segment in positive territory — with SiriusXM gaining 2% to $4.07 and iHeartMedia rising 1.5% to $3.45. Meanwhile, the eight stocks covering record labels and music publishers lost an average of 1.1%, and four live music stocks fell by an average of 1.7%. The six streaming companies in the Billboard Global Music Index lost an average of 6.9%.
Two streaming companies, LiveOne and Anghami, had the sharpest declines of the week. Abu Dhabi-based Anghami dropped 19% to $0.68, bringing its year-to-date loss to 57.4%. U.S. music streamer LiveOne fell 23.4% to $1.05 and has lost 36% of its value since spinning off its PodcastOne division on Sept. 11 and attracting media attention over allegations its Kast Media division did not pay some advertising revenues to podcasters. The spinoff hasn’t helped the company’s combined value: Trading under the name Courtside Group, the podcast company’s share price fell to $2.05 this week, 52% below its opening trading price on Sept. 8. The other streaming stocks almost broke even this week: Spotify, Tencent Music Entertainment, Cloud Music and Deezer had an average share price decline of just 0.2%.
Hipgnosis Songs Fund rose 2.8% to 0.832 pounds ($1.02) a week after dropping 12.8% on news the publicly traded investment trust plans to sell some catalogs for $465 million. The sale proceeds would fund share buybacks and repurchase debt, which Hipgnosis believes will support the beleaguered share price and reset the company’s net asset value.
Shares of Warner Music Group (WMG) dropped 4.7% to $30.76 this week following the announcement on Monday (Sept. 18) that BMG is taking control of its digital distribution and will no longer use WMG’s ADA Distribution (though it will continue to outsource its physical distribution). The news didn’t impact WMG’s share price until Wednesday (Sept. 20), when a report by analysts at Guggenheim stated that BMG’s decision would cause “a staggered reduction in WMG gross revenue” beginning Dec. 31 of roughly $250 million annually. Losing BMG’s digital business won’t be a major hit to WMG’s earnings before interest, taxes, depreciation and amortization (EBITDA), however: Guggenheim believes WMG’s revenue from BMG had an EBITDA margin in the low single digits and would have “minimal free cash flow impact.” Guggenheim has a $37 price target on WMG, which implies 20% of upside from Friday’s closing price.
News that Concord plans to buy Round Hill Music Royalty Fund for $1.15 per share sent Round Hill shares soaring 64.4% on Friday (Sept. 8), from $0.6875 to $1.13 per share. They finished the week up 62.6%, leading all music stocks by a wide margin.
The deal, which must be approved by at least 75% of Round Hill’s shareholders at the company’s Oct. 18 general meeting, values the rights in the fund at nearly $469 million. On March 6, an independent valuation from Citron Cooperman put Round Hill’s economic net asset value at $519.6 million, according to the company’s 2022 annual report. That puts Concord’s bid at a 9.7% discount to economic NAV — a vast improvement from the 46% discount the stock had been trading at before the deal was announced.
Round Hill competitor Hipgnosis Songs Fund was also a beneficiary of Concord’s announcement. Shares of Hipgnosis rose 15.7% to 0.923 pounds ($1.15) on Friday, bringing the stock’s one-week gain to 16.8%. Hipgnosis shares have been trading at a steep discount to the company’s net asset value — a measure of the company’s catalog, less liabilities — and hadn’t closed above 0.923 pounds since Sept. 27, 2022. The fact that Concord found a buyer at a price close to its NAV could have signaled to Hipgnosis investors that its shares should be trading closer to its NAV. Some Hipgnosis investors may have also believed that, like the Concord deal, Hipgnosis could also find a suitor that would bid close to the NAV.
Round Hill and Hipgnosis were — by far — the biggest gainers of the week. Overall, the 21-stock Billboard Global Music Index dropped 0.8% to 1,348.41. Year-to-date, the index has gained 15.5%.
No other music stocks had a double-digit gain, and just six others finished the week in positive territory. Twelve stocks lost ground this week and one stock, music streamer Anghami, was unchanged. French music streamer Deezer gained 6.8% and was probably helped by its announcement of a partnership with Universal Music Group to adopt a new system for calculating streaming royalties. Universal Music Group shares improved 3.8% to 23.52 euros ($25.20).
Stocks were down around the world this week. In the United States, the S&P 500 fell 1.3% and the Nasdaq composite dropped 1.9%. South Korea’s KOSPI composite index lost 0.6%. In the United Kingdom, the FTSE 100 was a bright spot with a slight 0.2% gain.
With the help of Round Hill and Hipgnosis, the eight stocks in the record labels and publishing category on the Billboard Global Music Index had an average gain of 10.3%. The other categories saw losses; four live music stocks had a 0.9% average decline, six streaming stocks dropped an average of 3.9% and three radio stocks had a 4.7% average decline.
LiveOne shares fell 10.4% on Friday following the company’s spin-off of its PodcastOne segment on the Nasdaq exchange. That brought its shares’ one-week loss to 21.8%. LiveOne distributed about 19% of PodcastOne shares to LiveOne shareholders of record as of Sept. 5, but the podcast company’s trading debut got off to a rocky start on Friday. Trading under the ticker PODC, shares of PodcastOne owner and operater Courtside Group fell 45.1% to $4.39 from a starting price of $8 per share.
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% […]
Live music companies’ stocks fell an average of 4.4% on this week’s Billboard Global Music Index despite their optimism about sustained consumer spending and healthy revenue and ticket sales in the second half of the year. While Live Nation shares rose 0.5% to $84.79, the other promoters and ticketing companies in the index had down weeks: Madison Square Garden Entertainment fell 2.7%, CTS Eventim dropped 5.7% and Sphere Entertainment Co. plunged 9.6%.
Sphere Entertainment shares have gained over 19% since the company turned on the external display on its state-of-the-art Las Vegas venue and showcased the potential inside the structure on July 5. The company’s second quarter results, released Tuesday, showed revenue of $129.1 million — with the Sphere contributing just $700,000 and the remainder coming from MSG Networks. Sphere’s share price rose nearly 8% to $39.58 following Tuesday’s earnings results but fell nearly 15% over the next three days. The $2.3-billion Sphere will open on Sept. 29 with a 25-date residency by U2.
iHeartMedia shares rose 6.6% for the week to close at $3.56 on Friday (Aug. 25), making the radio giant the week’s greatest gainer on the Billboard Global Music Index. However, radio companies’ struggle with weak national advertising has hurt their share prices overall in 2023. Year to date through Friday, iHeartMedia was down 41.9% and Cumulus Media had lost 41.9%. Audacy, troubled by debt on top of the soft advertising market, was de-listed by the New York Stock Exchange on May 16 and currently trades over the counter at 75 cents per share despite a reverse stock split on June 30 raising the price from 7 cents to $2.13. Audacy was removed from the Billboard Global Music Index following the de-listing.
Overall, the 21-stock Billboard Global Music Index was flat this week at 1,298.80. Ten stocks finished the week in positive territory, ten stocks lost ground and one stock, Round Hill Music Royalty Fund, was unchanged. Record labels and music publishers were the top performing sector with an average gain of 1.7% and only one company, Universal Music Group (down 0.7%), finished in negative territory. Streaming companies and radio companies suffered average weekly losses of 1.3% and 1.7%, respectively.
Year-to-date, the index has increased 11.2%, even as it’s now on its fifth straight week without a gain.
Stocks in general performed better than music stocks. In the United States, the S&P 500 gained 0.8% and the tech-heavy Nasdaq composite gained 2.3%. In the United Kingdom, the FTSE gained 1%. South Korea’s KOSPI composite index gained 0.6%.
The week’s biggest loser, streaming company Anghami, fell 17.5% to 94 cents per share. The stock traded below $1 per share from Wednesday to Friday, marking the first time since July 18 the stock has dropped below $1. On Monday, Anghami announced the sale of a convertible note worth $5 million to SRMG Ventures, a venture arm of Saudi Research and Media Group. The company plans to use the proceeds for working capital, growth and other corporate purposes.
Tencent Music Entertainment topped all music stocks this week after second-quarter earnings on Tuesday helped the company’s share price gain 7.2% to $6.53. The Chinese music streaming company, traded on both the New York Stock Exchange and the Hong Kong Stock Exchange, reported second quarter revenue of $1.01 billion (up 5.5% year over year) and net profit of $179 million (up 51.6%).
Investors tend to react positively when companies report strong subscriber numbers and TME had good news about the surging Chinese market. TME finished the quarter with 99.4 million subscribers, up 20% from the prior-year period, and for the first time its music services (QQ Music, Kuguo Music and Kuwo Music) generated more revenue than its social entertainment services (WeSing). Users’ willingness to pay for copyrighted music, whether to listen to songs or enjoy premium features, “marks a significant step along TME’s growth trajectory,” said CEO Cussion Pang during Tuesday’s earnings call.
Tencent Music Entertainment was the only music stock with a double-digit gain and one of only two stocks to finish the week in positive territory. With Round Hill Music Royalty Fund unchanged, the remaining 18 stocks in the 21-stock Billboard Global Music Index lost ground this week. The index fell 3% to 1,299.04, the fourth straight week the index declined, and has lost 10.2% of its value since peaking at 1,447.32 for the week ended July 21.
Streaming companies (Spotify, TME, Cloud Music, Anghami, Deezer) dropped by an average of 1%. Live music companies (Live Nation, MSG Entertainment, Sphere Entertainment Co., CTS Eventim) had an average decline of 3.1%. Record labels, publishers and distributors (Universal Music Group, Warner Music Group, HYBE, SM, Believe, Round Hill, Hipgnosis Songs Fund) fell an average 4.6%. Radio and satellite broadcasters (SiriusXM, iHeartMedia, Cumulus Media) dropped by an average of 5.1%.
Music stocks’ decline reflected the losses seen by stocks around the world this week. Higher bond yields have helped dampen interest in equities and investors are increasingly looking for safer places to put cash. In the United States, the S&P 500 declined 2.1% and the Nasdaq composite fell 2.6%. In the United Kingdom, the FTSE 100 dropped 3.5%. South Korean’s KOSPI composite index fell 3.3%, the biggest one-week point and percentage decline since Sept. 2022, due to falling operating profits, concerns about the Chinese economy and high interest rates.
K-pop stocks were among this week’s biggest losers. Shares of YG Entertainment and JYP Entertainment, neither of which are in the index, fell 12.1% and 13.3%, respectively. HYBE shares dropped 7.3% and SM Entertainment fell 6.7%. All four K-pop companies’ share prices have made large gains this year, however. Even after this week’s declines, SM, YG and JYP have gained between 63% and 66% while HYBE shares are up 36.3%.
Boosted by K-pop’s growing popularity and artists’ return to concert stages, the four publicly traded South Korean music companies — HYBE, SM Entertainment, YG Entertainment and JYP Entertainment — posted average revenue growth of 71% in the second quarter of 2023, according to Billboard’s analysis of their recent earnings reports.
Sky-high growth rates in recent quarters have helped make the K-pop companies a wise investment in 2023: Through Wednesday (Aug. 16), the four share prices increased an average of 63.6% year to date, adding more than $4.7 billion in market capitalization cumulatively to the companies’ stocks. In contrast, stocks of the two largest standalone music companies, Universal Music Group and Warner Music Group, have gained 3.6% and lost 6%, respectively, year-to-date through Tuesday (Aug. 15).
In terms of revenue growth, the leader in the second quarter was JYP Entertainment, home to the groups Stray Kids and Twice. JYP’s revenue grew 124% to 151.7 billion won ($115.2 million), with new albums by Stray Kids, Twice and NMixx driving a 298% increase in physical sales to 74.1 billion won ($56.3 million). Republic Records, JYP’s partner in the United States, accounted for 14.5 billion won ($11 million) of physical sales, or about 20% of the total amount. Elsewhere, JYP’s concert revenue grew 44% year-over-year to a record 14.4 billion won ($10.9 million) while merchandise sales climbed 151% to 21.7 billion won ($16.5 million). Domestic streaming revenue grew 18% to 2.2 billion won ($1.7 million) while overseas streaming revenue jumped 82% to 10.3 billion won ($7.8 million).
YG Entertainment boasts the greatest share price gain among the group at 75.6% year to date. The company behind breakthrough girl group BLACKPINK, YG posted revenue of 158.3 billion won ($120.2 million) in the second quarter, up 108% from the prior-year period.
JYP Entertainment’s operating income grew 88% to 45.6 billion won ($34.6 million) but missed its 51-billion won estimate, causing the company’s share price to fall 8.2% the following day. Although its revenue grew 124% in the quarter, JYP was hurt by what it called a “temporary increase in content product costs.” As a result, its cost of goods sold rose 162% while gross margin percentage — gross profit as a percent of sales — declined 1.6 percentage points to 47.7%.
Expenses also grew faster than revenue at HYBE, where cost of sales grew 25% while sales, general and administrative expenses climbed 32%. HYBE’s operating profit declined 8% as a result, while net income improved 19% despite a 21% growth in revenue. HYBE’s share price declined just 0.9% the day after the results were released; with a 38.9% gain year-to-date, its stock boasts the lowest appreciation of the four K-pop companies.