Shares in Universal Music Group ( UMG ) rose 3 percent on Friday — the same day news broke that the company would lay off hundreds of employees — and ended the week up 6.9 percent at 26.95 euros ($29.54 ). The prospect of cost savings made UMG the week's top-performing music stock, outpacing French music streamer Deezer's 6.5% gain and 6% improvements from both Chinese music streamer Tencent Music Entertainment and live MSG Entertainment.
UMG first told investors it planned layoffs on its October earnings call. On Friday, a report from Bloomberg said UMG plans layoffs as early as this quarter, primarily in its recorded music division. A company spokesman declined to comment on the scope and timing of the layoffs, but said Advertising sign UMG is “creating efficiencies” in certain areas of the business “so we can remain nimble and responsive to a dynamic market while realizing the benefits of our scale.” UMG stock gained 14.7% in 2023.
Although no stocks ended the week with double-digit gains, the 20-company Billboard Global Music Index rose 3.6 percent to a record 1,566.45, as 12 companies posted gains and eight companies' share prices fell. Streaming companies led the way with an average gain of 3.9%. Live music companies saw an average improvement of 0.7%. Record labels and publishers were down an average of 1.5%. Radio companies lost an average of 4%.
Music stocks outperformed the tech-heavy Nasdaq composite, which gained 3.1 percent to 14,972.76 and easily outpaced the S&P 500's 1.8 percent rise to 4,783.83. In the UK, the FTSE 100 fell 0.8% to 7,624.93. South Korea's KOSPI composite index fell 2.1 percent to 2,525.05.
The index was buoyed by Spotify's 4.9% gain to $203.03 this week. Spotify is up 12.4% since it announced layoffs on Dec. 4 and pledged to operate more efficiently. On Thursday, Spotify closed above $200 for the first time since February 1, 2022. At Friday's closing price, the stock is up 120.5% over the past 52 weeks.
Live Nation ended the week up 1.6% at $90.66 after analyst Roth Eric Handler was upgraded the stock to “buy” and raised the price target from $92 to $114. The $114 price target implies an upside of nearly 26% from Friday's close.
Shares in French music label Believe fell 10.5 percent to 8.97 euros ($9.83) after news on Friday that the company's investors were seeking to take the company private. According to Reuters reportthe largest shareholders of Believe, which includes the founder; Denis Ladegaillerie and US investment firm TCV, are working with advisers to gauge interest from private equity firms. In the first nine months of 2023, Believe, which owns digital distributor TuneCore and labels such as PlayTwo and Jo&Co, had revenue of 630.4 million euros ($691 million), up 14.8 percent year-on-year.
While other recorded music and publishing companies posted gains this week, K-pop stocks fell. HYBE's 2 percent drop to 247,000 won ($188.05) was the best of the four South Korean music companies. JYP Entertainment fell 8.3% to 96,600 won ($73.54). Two others fell 5.9% each: SM Entertainment closed at 88,200 won ($67.15) and YG Entertainment ended the week at 43,100 won ($32.81).
from our partners at https://www.billboard.com/pro/universal-music-stock-rises-layoff-news-k-pop-stocks-drop/