Spotify rode a post-election wave of market excitement to close above $400 for the first time on Friday (Nov. 8), valuing the streaming music giant at nearly $80.5 billion. Before closing at $400.68, up 4.1% for the week, the company's stock hit an all-time high of $405.88.
The Stockholm, Sweden-based company's share price rose 113% in 2024 as it overtook Universal Music Group (UMG) as the most valuable music company. As investors began to tire of high-growth streaming companies with little evidence of profitability, Spotify underwent two major rounds of layoffs in 2023, helping to cut costs without sacrificing subscriber growth or revenue. With third-quarter earnings coming up on Tuesday (November 12), Spotify will show whether it has maintained that momentum. At least one analyst is bullish on earnings: Deutsche Bank raised its Spotify price target on Wednesday to $440 from $430.
US stock markets soared this week after his election Donald Trump on Tuesday (November 5) and the Federal Reserve's decision on Thursday (November 7) to cut interest rates by a quarter of a percentage point. On Friday, the Nasdaq composite closed at an all-time high of 19,286.78, up 5.7%. The S&P 500 gained 4.7% to close at a record high of 5,995.54. China's Shanghai Composite rose 5.5 percent to 3,452.30. South Korea's KOSPI composite edged up just 0.7 percent to 2,561.15. In the UK, the FTSE 100 fell 1.3% to 8,072.39 points.
The 20-company Billboard Global Music Index gained 2.4 percent to an all-time high of 2,043.02, extending its year-to-date gain to 33.2 percent. The index had 13 stocks in positive territory while six lost ground and one remained unchanged.
The top music stock of the week was iHeartMedia, which jumped 16.7% to $2.44 after the company said it would restructure much of its retiring debt and plans to save $200 million in 2025 through cuts costs and the embrace of technology. “Technology is key to increasing our operating leverage and is a constant focus for us,” CEO Bob Pittman he said during an earnings call Thursday. “It allows us to speed up processes, streamline legacy systems and empowers our people to create more, better and faster.” Shares of iHeartMedia are down 8.6% year to date, but are up 180% since May 24.
LiveOne gained 15.6% to $0.89 a share after the music streamer said revenue rose 14% to $32.6 million and paid members rose 27% to 645,000 in its fiscal second quarter ended 30 September. $9.00.
On the live front, Live Nation shares rose 5.1% to $123.02 after a post-election rally. The concert promoter is currently facing a lawsuit from the US Department of Justice, but could find a better outcome from new appointments made by the Trump administration. The election wasn't the only reason for the stock's gains: Morgan Stanley raised its price target to $140 from $120 based on “a combination of strong underlying consumer demand and strong touring artist incentives,” analysts wrote in an investment note on Tuesday. Deutsche Bank also raised its Live Nation price target to $130 from $122.
K-pop stocks rose this week despite HYBE and SM Entertainment reporting sharp declines in profits last quarter due in part to weaker recorded music revenue. HYBE shares jumped 6.4% after the company reported a 99% drop in net income. Similarly, SM Entertainment gained 7.2% the same week the company announced its quarterly net profit fell 96% on a 9% drop in revenue and a 36% drop in recorded music revenue. Investors may have gained optimism from SM Entertainment's announcement that it will launch a new girl group – its first since aespa debuted five years ago – in 2025 with a single and release an album in the first quarter.
JYP Entertainment, which has yet to report quarterly earnings, soared 12.6%, and YG Entertainment continued its hot streak, rising 6.3% to take its three-week gain to 17.6% . YG received a boost from the success of ROSÉ's “APT” featuring Bruno Mars. The song is currently in its second week atop both the Billboard Global 200 and Billboard Global Excl. American charts.
Shares of Tencent Music Entertainment ( TME ) rose 2.4% to $11.39 ahead of the company's third-quarter earnings on Tuesday (Nov 12). Bernstein initiated coverage of TME with a price target of $14. Barclays initiated coverage with an “overweight” rating and a $16 price target.
German concert promoter CTS Eventim was the week's worst-performing music title, down 10.4 percent to 87.70 euros ($94.05). The company will release third-quarter results on November 21. Elsewhere, Cumulus Media fell 6.4% to $0.88, adding to last week's 19% decline, while SiriusXM fell 5.5% to $26.13.
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