The 1.6 billion valuation gives Believe a 3.6 ratio of enterprise value to 2020 revenue – well under Warner Music Group’s 4.8 based on Wednesday’s closing price.
French digital music company Believe is valued at 1.6 billion euros ($1.9 billion) after a bumpy first day of trading on the Euronext Paris stock exchange.
Despite launching an IPO while the fast-growing digital music market attracts heavy investor interest, Believe’s shares got off to a rocky start in its Paris bow. Shares opened at 18.40 euros and fell as far as 15.87 euros – 18.6% below its 19.50 euro IPO price -- before closing at 16.20 euros.
First-day trading capped a string of lowered expectations for the owner of digital distributor TuneCore and metal label Nuclear Blast, among other companies. Believe’s IPO on Wednesday (June 9) valued the company at 1.9 billion euros ($2.3 billion) and raised 300 million euros ($365.4 million) — up to 330 million ($402.9 million) with over-allotment. But it had priced its IPO at the bottom of its price range of 19.50 to 22.50 euros. Prior to that, Believe downgraded its IPO target to 300 million euros from 500 million to 300 million euros when Believe launched its IPO on June 1.