Live Nation's share price has proved resilient after the US Department of Justice sued and tried to break up the company's concert promotion and ticketing operations. Eight days into what is likely to be a years-long journey through the court system, Live Nation shares fell 2.3% to $93.74 and were flat after an initial decline on the day of the DOJ's announcement.
Shares of Live Nation closed at $101.40 on May 22, a day before the DOJ announced its lawsuit, and fell 7.8% to $93.48 when the news broke the next day. Since the announcement, however, Live Nation shares have risen 0.3%. However, amid uncertainty surrounding the outcome of the lawsuit, Live Nation's year-to-date gain has fallen to just 0.1%, while its 52-week gain is down 13.2%.
Regardless of the outcome, the mere existence of a protracted legal battle is enough to bring resistance to the stock. Cutting their price target on Live Nation to $116 from $126 this week, JP Morgan analysts said in a note to investors on Wednesday (May 29) that they doubt the DOJ will succeed in breaking up the company and the ticketing industry Ticketmaster, but noted the effect of an “emotion salience.” JP Morgan maintains its overweight rating on Live Nation, and analysts “believe continued execution at [adjusted operating income] The development should drive the shares higher, with significant upside if developments in the trial are positive.”
Music stocks fell broadly this week as the biggest companies in the world Billboard Global Music Index lost ground. The index fell 2.3% to 1,799.07 points as Spotify fell 3.8% to $296.53, Universal Music Group fell 0.9% to 28.58 euros ($31.03), Warner Music Group sank 2.2% to $29.78 and HYBE fell 0.4% won ($0,200). Ten of the index's 20 companies were losers this week, nine gained ground and one was unchanged.
The index has gained 17.9% year-to-date on the strength of music streaming companies. Tencent Music Entertainment and Spotify lead all stocks with gains of 60.4% and 57.8%, respectively, through the end of May. Elsewhere, Hipgnosis Songs Fund gained 39.7% on the company's pending sale to Blackstone, German concert promoter CTS Eventim rose 26.8% and Chinese music streamer Cloud Music gained 22.7%.
Radio company iHeartMedia has the distinction of being the top-performing music stock of the week, while also having the worst year-to-date performance. Shares of the radio giant rose 6.4% to $0.926, marking a break from a month-long freefall that saw the stock trade below $1.00 a share over the past seven trading days. Even after this week's gain, iHeartMedia ended May down 56% and has lost 65.3% year-to-date.
Shares of Reservoir Media gained 2.4% to $8.04 this week after the company reported fourth-quarter earnings on Thursday (May 30). The company beat guidance for both revenue and adjusted EBITDA, and its share price rose as much as 15.5% on the news. Following the earnings results, B Riley raised its price target on Reservoir to $11.50.
Music streaming company LiveOne fell 6.3 percent to $1.65 this week after fiscal year results on Thursday showed the company's revenue rose 19 percent to $118.4 million. Shares of LiveOne are up 17.9% year to date.
Overall stocks fell broadly this week, but outperformed the Billboard Global Music Index. In the United States, the S&P 500 fell 0.5 percent to 5,277.51 and the Nasdaq composite fell 1.1 percent to 16,735.02. In the UK, the FTSE 100 fell 0.5% to 8,275.38 points. South Korea's KOSPI composite index fell 1.9 percent to 2,636.52. China's Shanghai Composite fell just 0.1 percent to 3,086.81 points.
