Music stocks fell sharply this week as global markets were rattled by concerns about the health of the US economy and Friday's disappointing jobs report.
K-pop stocks took a big tumble this week as a major Korean stock index posted its biggest one-day drop ever. South Korea's KOSPI composite fell 8.8 percent on Monday as investors gripped by fears of a U.S. recession. The market improved the next day, but the KOSPI ended the week down 4.9% at 2,544.81.
South Korean music companies suffered unfortunate casualties during the week of unrest. The four main K-pop labels fell an average of 10.8%, and their average year-to-date loss rose to 40.9%. HYBE fell 10.2% to 165,000 won ($123.25), taking its year-to-date loss to 29.1%. YG Entertainment fell 9.8% to 30,800 won ($23.01). SM Entertainment fell 10.4% to 56,300 won ($42.05). JYP Entertainment posted the worst decline, down 13.0% to 44,450 ($33.20) and taking its year-to-date loss to 56.1%.
The Billboard World Music Index fell 4.8% to 1,744.64, paring the year-to-date gain to 13.7% and marking the index's worst week since falling 5.1% in the week ended Feb. 24 2023. The broader stock market had a miserable week. In the United States, the Nasdaq composite fell 5.8% and the S&P 500 slipped 4.2%. In the UK, the FTSE 100 lost 2.3%. China's Shanghai Composite fell 2.7 percent.
Just three of BGMI's 20 stocks ended the week in positive territory, and two of the three gainers are among the index's smallest contributors. The top-performing stock, Believe, which gained 3.7 percent to 15.06 euros ($16.69), has a stake of less than 4 percent after a consortium led by chief executive Denis Ladegaillerie acquired almost all of the equity.
The second best performer, Anghami, has the smallest market capitalization of all the companies in the index at $23 million. The Abu Dhabi-based music streamer gained 2.3% to $0.90 after it announced on Thursday (5 September) that video streaming subscriptions had grown by 18% from a majority investment by OSN Group, owner of the video streaming platform by MENA-based OSN+ requirement in April.
Live Nation fell 5.0% to $92.81 despite two positive analyst views this week. BofA Securities initiated coverage of Live Nation this week with a $125 price target and a “buy” rating. Oppenheimer, which dropped Live Nation's price target from $120 to $110 in May, raised it back to $120 on Friday.
Sphere Entertainment Co. fell 7.1% to $43.27 after Benchmark downgraded Sphere shares to “sell” with a $40 price target, well below the previous day's close of $46.60. A Benchmark analyst cited concerns about “scalability, high production costs and a potentially overwhelming profitability outlook” for the $2.3 billion Las Vegas venue.
The week's biggest decliner came from SiriusXM, which fell 17.0% to $2.73. On Wednesday (Sept. 4), SiriusXM and Liberty Media announced the final exchange ratio for the pending merger of SiriusXM and Liberty Media's monitoring stock, Liberty SiriusXM Holdings. On Monday (September 9), Liberty Media will exchange each share of Liberty SiriusXM common stock for 0.8375 shares of new SiriusXM stock. SiriusXM shareholders will receive 0.1 shares of the new SiriusXM stock, which will trade on the same SIRI index as current SiriusXM stock. After the merger, former Liberty SiriusXM stockholders will own approximately 81% of the new stock.
BGMI's most valuable component, Spotify, fell 5.9% to $322.75. Another major index stock, Universal Music Group (UMG), fell 3.0% to 22.93 euros ($25.42). UMG will host investors and analysts at Capital Markets Day on Tuesday (September 10).
