Erasing about $423 million in market capitalization, Live Nation's stock plunged 21.4% over Thursday and Friday due to a warning of weak ticket sales made on Thursday. After dropping 10.9% on Thursday, Live Nation shares fell another 11.8% on Friday and closed at $8.99.

At Live Nation's Investor and Analyst Day presentation July 15, executives attempted to build a case for the company's long-term value as it warned of drops in ticket sales in 2010. But rather than calming investors, the presentation -- or at least a few of its most negative data points -- sent them fleeing. An average of 13.8 million shares was traded on Thursday and Friday. A typical daily volume is just 3.1 million shares.

Some analysts quickly updated their models to reflect this year's lower expected revenue and earnings. Standard & Poor analyst Tuna Amobi downgraded Live Nation to "hold" from "buy" and dropped his target price to $10 from $17, AP reported. Stifel Nicolaus analyst Benjamin Mogil also reduced his target price.

The broader market dropped slightly on Friday. The Dow Jones Industrial Average was down 2.5% and the NASDAQ Composite fell 3.1%.

Live Nation shares closed at $12.15 the day after the companies merged. Share prices rose as high as $16.90 in late April.

Beyond the short term impacts of slow sales and postponed concerts, there are concerns about the company's ability to control talent costs in the future. Doubts about Live Nation's long-term outlook was summed up well by industry commentator Bob Lefsetz, whose constant criticism of the company earned him mentions by three Live Nation executives during Thursday's presentation. "We'll see," at his blog.

Questions? Comments? Let us know: @billboardbiz

Print