Cumulus Media led all music stocks this week, gaining 20.2% to $4.70 after the radio station said it had used a “poison pill” to fend off a Singapore-based investor.
In January, Renew Group Private Ltd increased its stake in Cumulus Media from 5.2% to 10.01%. To protect the best interests of all Cumulus shareholders, the board explained, the company chose to institute a “limited-term shareholder rights program” that would reduce Renew Group's equity if it exceeds a 15 percent stake. In justifying the move, Cumulus said Renew Group has investments in other media companies, including a direct competitor of Cumulus.
Music stocks were broadly higher this week, as the Billboard World Music Index improved 1.5% to a new high of 1,684.49. The index is up 9.8% in the new year and is up 38.4% over the past 52 weeks. Of the 20 stocks in the index, 13 ended the week in positive territory, six lost value and one remained unchanged.
Stock markets around the world hit new highs this week as well. In the United States, the Dow hit a new closing high of 5,088.80 on Friday (February 23) after topping 5,100 for the first time earlier in the day. The Nasdaq composite also hit a new high on Friday and ended the week up 1.4 percent at 15,996.82. The S&P 500 improved 1.7% to a new closing high of 5,088.80. Japan's Nikkei 225 index hit an all-time high on Thursday (February 22nd), finally surpassing the previous record set in 1989 when Japan's economy was the envy of the world.
Music streamer LiveOne was the second-best performing music stock of the week after its shares jumped 17.9% to $1.71, taking its year-over-year improvement to 22.1%. With no other music stocks posting double-digit gains, the next best performer came from Chinese music streaming service Cloud Music. Its shares rose 4.1 percent to HKD 90.95 ($11.63) as Chinese stocks finished the week strong after hitting a five-year low in February. In an effort to bolster the market, Chinese regulators this week imposed trading restrictions, including limits on short selling and institutional investors.
Shares of Spotify gained another 4.0% this week to close at $256.10, taking its year-to-date gain to an impressive 36.3% (which has added about $13.4 billion to its market cap). On Wednesday (February 21), the company announced the creation of a new music consultancy, AUX, that will connect brands with artists. The inaugural campaign matches Coca-Cola with producer DJ Peggy Gou in what the company called “a long-term partnership that will include live concerts and events, social media content, branded playlists and promotional support on the platform.”
Shares of Live Nation ended the week up 2.2% at $95.32 and rose 2% on Friday after the company reported encouraging fourth-quarter earnings. Morgan Stanley raised its price target to $120 from $110 in part because Live Nation said it expects double-digit growth in adjusted operating income in 2024 thanks to a busy high-margin arena tour schedule. “This is going to be a great year,” president/CEO Michael Rapinoe he said during Thursday's earnings call.
Radio station iHeartMedia was the index's biggest loser for the week after falling 12.5% to $2.32. The company will announce its results for the fourth quarter of 2023 on February 29.
