Universal Music Group shares jumped 39% in their first trading day on the Euronext Amsterdam exchange.
The company, which controls artists like Taylor Swift and Drake as well as a vast publishing catalog including the Beatles and Bob Dylan, ended the day with a valuation of nearly $53 billion.
The spinoff of 60% of the music entity had been teased for a long time by parent Vivendi. Heading into today’s public debut, UMG’s share price was set at €18.50 per share, resulting in a market capitalization of €33.5 billion on the day of listing. By the end of day, the market value was €45 billion euros, or about $52.8 billion.
William Ackman’s Pershing Square Capital bought a 10% stake in the company over the summer. China’s Tencent has also accumulated 20% of UMG after two major investments in recent years.
After being ravaged by the internet during the early days of streaming, the music industry has had a resurgence amid the emergence of digital players like Spotify and Apple Music. Streaming now accounts for about 80% of industry revenue in the U.S., though its economic structure is dramatically different from the traditional physical-sales model that prevailed for decades. Artists have largely depended on touring and other sources of income, most of which have been constrained during the Covid-19 pandemic.
In reaction to the Universal IPO in Europe, the New York Stock Exchange-listed Warner Music Group saw its shares rise almost 10% in early trading as investors recognized the potential in the music sector. Billionaire Len Blavatnik controls most of WMG’s shares.
“Today’s listing marks an exciting milestone in UMG’s storied history,” CEO Lucian Grainge said, “reflecting our position as the world’s leading music-based entertainment company and our deep commitment to our amazing artists, songwriters and partners.”
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