Music Companies Not Spared as Stocks Tumble
It was a tough day on Wall Street.
Publicly traded music companies fared no better than any other as stocks across the market plunged on Wednesday. Sparked by weak economic data in the United States and Europe, equity markets suffered from widespread selling by investors seeking safer options. The tech-heavy Nasdaq fell 1.6 percent while the Dow dropped 1.4 percent and the Russell 2000, an index of small-cap stocks, declined 1.5 percent.
Stocks have been noticeably declining since the latter part of August. Over the last 9 trading days, the Nasdaq and has declined 3.7 percent, the Dow is down 2.6 percent and the Russell 2000 has given up 6.8 percent.
Live Nation declined 1.9 percent to $23.56 on Wednesday, the smallest decline of any music-related stock on a U.S. exchange. Like the Nasdaq, Live Nation has fallen 3.7 percent over the last nine trading days. However, Live Nation has been trending upward recently. The company's stock is up 19.2 percent this year and has risen 28 percent over the last 12 months.
SFX Entertainment, the EDM-focused music promoter, fell 7.1 percent to $4.66. The company's intraday low of $4.61 is also the company's all-time low. Over the last nine trading days, SFX has declined 28.2 percent. Its shares have fallen far since the company's initial public offering last October. The IPO was priced at $13 and shares ended the first day of trading at $11.89.
Pandora dropped 3.9 percent to $23.23. Its shares have fallen 12.9 percent over the last nine trading days. For the year, a 12.6-percent decline in Pandora's share price has taken about $710 million off the company's market capitalization.
Sirius XM declined 2 percent to $3.42. Its nine-day decline is 6.4 percent. Sirius shares have broken even since June and have fallen 1.7 percent year to date. Some good news has already been priced into the stock: Sirius raised its forecast for subscriber growth last month by 200,000 subscribers.
The two concert promoters, Live Nation and SFX Entertainment, could be slightly exposed to worries about the spreading of the ebola virus in the United States. According to Business Insider, some traders attributed Wednesday's declines of airline stocks -- Delta, American and Southwest each fell more than 3 percent -- to ebola fears. If a deadly, communicable disease has the potential to impact companies that group hundreds of passengers into a single plane, it could also impact a live entertainment industry that puts thousands of people into music venues.