HYBE shares gain 18% after UMG partnership announcement as music stocks rise across the board

HYBE shares jumped 17.5% to 230,000 won ($170.84) this week following news that the company had closed a ten-year partnership with Universal Music Group (UMG) that calls for the label to distribute physical and digital music of HYBE and to place its artists on HYBE's Weverse social media platform. CEO of HYBE America Braun scooter will oversee all promotional and marketing partnerships between the two companies. After falling 9.1% in the previous four weeks, the announcement brought the South Korean company's year-over-year deficit to just 1.5%.

Another K-pop company, SM Entertainment, was one of five music companies to post double-digit stock gains this week, with its shares rising 14 percent to 87,800 won ($65.22). On Wednesday (March 27), the company announced his appointment Tak Young-Jun to co-CEO along with the existing CEO Jang Cheol-hyuk. SM Entertainment also announced a dividend of 1,200 won ($0.89) per share totaling 28.1 billion won ($20.8 million), an amount equal to the previous year's dividend.

The 20-company Billboard Global Music Index rose 1.9 percent to a record 1,752.24, as 16 stocks posted gains, only three lost ground and one was flat. Even with an unusually high number of winners, the float-adjusted index, which gives more weight to companies with higher value, fell this week because two of the three losers are among the most valuable music companies. Spotify, which has a market capitalization of about $50 billion, fell 0.4 percent to $263.90. Live Nation fell 0.2% to $105.77. Its market value is around $24 billion. Two more of the index's biggest companies gained less than 2 percent: UMG rose 1.6 percent to 27.88 euros ($30.11) and Warner Music Group ( WMG ) improved 1.4 percent to 33, $02. Another valuable member of the index, Chinese music broadcaster Tencent Music Entertainment, rose 2.2% to $11.19.

Shares in Hipgnosis Songs Fund rose 13.5% to 69 pence ($0.87) after the company's board published an internal report on Thursday (March 28) that showed the fund's investment adviser, Hipgnosis Song Management, “substantially” overstated annual revenue and misled investors about the amount of control exercised over its portfolio rights. The negative news was welcomed by investors who have taken issue with the company's accounting practices and portfolio valuation. Hipgnosis shares traded as high as 52.9 pence ($0.67) on March 4, but have rebounded since the company overhauled its board and hired Shot Tower Capital to write its due diligence report.

CTS Eventim, the German live event promoter and ticketing company, rose 11.1% to 82.45 euros ($89.05) after releasing fourth-quarter and full-year 2023 earnings on Tuesday (March 26 ). Company expects 'moderate growth' in total revenue in 2024. Demand 'continually increasing', CEO Klaus-Peter Schulenberg wrote in the annual report, and the company expects the recent fall in inflation to provide “new consumption-led impetus for growth going forward.”

Shares in Believe rose 7.2% this week to 16.92 euros ($18.27) after the company said it would accept a formal offer from WMG until April 7. WMG disclosed its interest in Belief on March 7 and said it would be willing to pay at least 17 euros ($18.36) per share. A consortium that includes the CEO of Believe Denis Ladegaillerie has lined up a large block of shares and is willing to offer 15 euros ($16.20) per share for the remainder. With Believe shares currently trading so close to WMG's mellow offer, investors apparently don't think the joint venture's initial offer will be enough.

Stocks were mixed as the trading week was cut short by the closure of some exchanges for Good Friday. In the United States, the Nasdaq composite fell 0.3% to 16,379.46 and the S&P 500 rose 0.4% to 5,254.35. In the UK, the FTSE 100 rose 0.3% to 7,952.62. South Korea's KOSPI composite was down 0.1 percent at 2,746.63. China's Shanghai Composite fell 0.2 percent to 3,041.17.