Coronavirus

Warner Music Group Approved for Nasdaq Listing

Warner Music Group
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Warner Music Group (WMG) is forging ahead with its stock market debut -- amid both the coronavirus pandemic and rumors of its potential acquisition by a Saudi Arabia-controlled fund.

In an updated filing with the SEC Thursday (May 7), WMG confirmed that it has been approved to list its shares on the Nasdaq stock exchange in the U.S. The company, home to superstars like Cardi B and Ed Sheeran, will trade under the ticker symbol "WMG."

"We have been approved to list our Class A common stock on Nasdaq," the filing reads. "We and the selling stockholders negotiated the initial public offering price per share with the representatives of the underwriters and, therefore, that price may not be indicative of the market price of our Class A common stock after this offering. We cannot assure you that an active public market for our Class A common stock will develop after this offering, or, if one does develop, that it will be sustained."

WMG, which was purchased by Len Blavatnik's Access Industries in 2011, first announced its plans for an initial public offering (IPO) back in February, taking the music industry by surprise. But concerns over the growing pandemic shook the stock market shortly after, and the company reportedly put its plans on hold.

Now, WMG appears to be back on track, though another rumor is swirling. The Hollywood Reporter reported earlier Thursday that Saudia Arabia’s Public Investment Fund (PIF) has made an offer to buy the company, weeks after the PIF's $500 million purchase of a 5.7% stake in Live Nation.

The Saudis' offer would be a late-stage attempt to buy WMG outright, or purchase a minority share if Blavatnik wants to retain a majority of the company. The clock is ticking: with approval from Nasdaq for an IPO, WMG can begin what's called "the road show" to gin up the interest of large investors and go public in just a few weeks. The time seems right, since stocks have recovered much of March and April's losses, and markets could slip again if a second pandemic wave creates more price volatility.

Billboard estimated WMG's valuation will be between $15 billion and $16 billion on the top end, and between $10 billion and $12 billion on the bottom end.

Meanwhile, WMG took an earnings hit due to the pandemic last quarter, posting a $74 million net loss on revenues of $1.071 billion for the three-month period ended March 31 -- representing a net income decline of $141 million and a 1.7% drop in revenue compared to the same period last year. However, the company's recorded music streaming revenue jumped 9.1% (11% in constant currency) to $586 million during the second quarter.

Glenn Peoples contributed reporting.

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