With the world in distress, Warner Music Group is pushing forward with some big moves for 2020. WMG, +12.00% priced its initial public offering on Wednesday at $25 a share. Furthermore, this is the higher end of its $23 to $26 price range. They also increased the size of the deal to 77 million shares from an original 70 million shares. This massive deal is marking the biggest stock launch of 2020.
On Wednesday the stock jumped a significant 8%, showing that the music industry might be down but it’s certainly not out.
Warner Music is owned by Len Blavatnik’s Access Industries. It was was bought in 2011 for a cool $3.3 billion. Additionally, the early announcements surrounding its intention to launch an IPO first were back in February. Unfortunately this date was delayed because of the coronavirus pandemic:
“THE SEVERITY AND THE DURATION OF THE PANDEMIC IS DIFFICULT TO PREDICT BUT IT IS EXPECTED THAT THE PANDEMIC WILL MATERIALLY AND ADVERSELY AFFECT THE GLOBAL ECONOMY, CREATING RISK AROUND THE TIMING AND COLLECTABILITY OF OUR ACCOUNTS RECEIVABLE AND LEADING TO A DECLINE IN CONSUMER DISCRETIONARY SPENDING WHICH, IN TURN, COULD HAVE A NEGATIVE IMPACT ON OUR RESULTS OF OPERATIONS, CASH FLOWS AND FINANCIAL CONDITION.”
Warner Music is the parent of many major record labels. This is including Atlantic Records, Warner Records and Elektra Records. They also are representing some huge artists. Some including: Ed Sheeran, Bruno Mars, Cardi B, Twenty One Pilots, Lizzo and Katy Perry.
While the world is in an uncertain time, recorded-music and music publishing thus far are being less affected economically by the pandemic than live-entertainment business. After an initial $12.5 billion evaluation, it seems no better time to launch than now for Warner Music Group.