Warner Music Group’s $15-Billion Day
Warner Music Group’s much-awaited initial public offering finally hit the Nasdaq on Wednesday and enjoyed an immediate boost in price for its 77 million shares made available on the market — 7 million more than previously announced last week. WMG closed at $30.12 a share on its first day of trading, giving the music major a $15.3 billion market cap valuation.
Warner announced a $25 set price for its stocks Wednesday morning, and by opening, the company was selling at around $27 per share with stocks steadily climbing until the 4 p.m. ET close.
With the offering consisting entirely of secondary shares through Warner’s parent company Access Industries, Warner itself didn’t get much in the way of profit. But Access Industries head Len Blavatnik is getting a hefty return on investment for the major music company, having purchased WMG for $3.3 billion in 2011 before taking the company private.
Warner’s IPO was previously delayed over complications from the ongoing coronavirus pandemic, and the company also delayed its pricing yesterday amid an industry-wide protest against racial inequality. (Blackout Tuesday, started by Atlantic executive Jamila Thomas and Platoon executive Brianna Agyemang, was observed by Warner’s flagship labels Atlantic, Warner and Elektra, as well as the two other music majors Universal and Sony.) The music company’s IPO is the biggest U.S. new listing for 2020 so far.
While this is the company’s second foray into the public market, Warner enjoyed a stronger opening on Wednesday than from its last IPO in 2005, when shares dipped to $16.40 from a $17 pre-opening pricing.
The record industry at large has been revitalized as tech giants like Spotify and Apple Music have turned the download-and-piracy era into a more sustainable streaming model. Streaming made up 80% of the recorded music business’s revenue in 2019, according to the Recording Industry Association of America. And according to Warner Music Group’s IPO prospects, Apple Music and Spotify alone accounted for 27% of WMG’s total revenues last year.