Shares of Universal Music Group ( UMG ) nearly hit an all-time high on Friday, hitting 27.47 euros ($29.98) before closing at 27.22 euros ($29.21), up 1% for the week. That was close to the high of 27.96 euros ($30.52) reached on Nov. 12, 2021, less than two months after the company was spun off from Vivendi, and hit a new 52-week high. The 1 percent gain followed last week's 6.9 percent improvement as investors reacted to news that the company expects to lay off staff in the first quarter.
If French music label Believe goes private, as has been reported, shareholders would expect a premium to the recent share price. That would explain why the company's share price rose 13.5% to 10.18 euros ($11.11) this week – more than offsetting the 10.5% drop in Believe shares last week after the news of the possible acquisition was published. According to a Reuters report, co-founder/CEO of Believe Denis Ladegaillerie and US investment firm TCV have pitched the idea to private equity firms.
The S&P 500 rose 1.2 percent to close at a record high of 4,839.81 on Friday, surpassing the previous high set two years ago. The Nasdaq did not set a record, but fared even better, climbing 2.3 percent to 15,310.97. Stocks in other countries did not respond to gains in US markets. In the UK, the FTSE 100 fell 2.1% to 7,461.93 points. South Korea's KOSPI composite index fell 2.1 percent to 2,472.74. China's Shanghai Composite fell 1.7 percent to 2,832.28.
Music stocks retreated slightly from last week's record high despite a double-digit rise in Believe and the majority of music stocks ending the week in positive territory. The 20-company Billboard Global Music Index fell 0.4% to 1,559.48 this week, slightly below last week's all-time high of 1,566.45. Twelve of the 20 stocks posted gains this week. Aside from the jump related to the Believe acquisition, the best-performing music stocks posted only low single-digit gains. MSG Entertainment rose 4.1% to $33.48 and SiriusXM improved 4% to $5.42.
The index's most valuable companies improved slightly: Apart from UMG's 1% gain, Spotify improved 0.8% to $204.71 and Live Nation rose 0.6% to $91.18. Those gains were overshadowed by losses in radio giant iHeartMedia, which fell 1.7 percent to $2.25, and three Asian companies: HYBE, SM Entertainment and Tencent Music Entertainment.
The index's biggest losers were K-pop companies HYBE and SM Entertainment, which fell 10.9 percent and 10.3 percent, respectively. HYBE has been on a roller coaster ride in January, jumping 9.6% from December 28 to January 11 before falling 14.1% over the next six trading days. SM Entertainment jumped 20.5% from the end of December to January 11, but is only down 3.4% from its high. Another big mover this week was Chinese music streamer Tencent Music Entertainment, which fell 9.5% to $8.51.
There was good news for all companies on Friday, when the University of Michigan was closely watched Consumer Sentiment Index jumped 13% in January, its highest level since July 2021. In the past two months, consumer sentiment rose 29% and Americans' expectations for future inflation fell to 2.9%. Consumer sentiment is now 60% above the historic low since June 2022, but remains 7% below the historical average.
The music companies will soon announce earnings results for the quarter ended December 31. The first companies out of the gate are SiriusXM on February 1st and Spotify on February 6th.
from our partners at https://www.billboard.com/pro/umg-shares-up-k-pop-tencent-losses-music-stocks-down/