Universal Music’s Spotify Stock Could Be Worth $2B

Universal Music Group still owned 6.487 million shares of Spotify -- or 3.59% of outstanding shares -- on Dec. 31, according to financial results the company disclosed ahead of going public.

Universal Music’s Spotify Stock Could Be Worth $2B

Universal Music Group still owned 6.487 million shares of Spotify — or 3.37% of outstanding shares — on Dec. 31, according to detailed financial results the company disclosed Wednesday in anticipation to being publicly traded by the end of September.

On Dec. 31, 2020, Spotify closed at $314.66 per share but has fallen since and on Friday (May 14) it closed at $223.59. Since UMG put the average share purchase price of 6.58 euros ($8.10) on April 13, 2018, the day Spotify shares began trading), if it sold the shares at the Dec. 31 closing price, UMG would have realized $2.04 billion, or a profit of $1.99 billion after subtracting out the combined share purchase price of $52.54 million.

If it still holds the shares, their current value is $1.45 billion — which would yield a profit of nearly $1.4 billion if sold at Friday’s share price.

UMG and the other major labels, Sony Music and Warner Music Group, each took equity as part of their licensing deals that allowed Spotify to launch in the U.S. in 2011. As of Dec. 31, UMG maintained a larger equity stake in Spotify than any of its competitors. Sony Music sold half its 5.707% stake for $768 million following Spotify’s IPO in April 2018, leaving it 5.082 million shares a 2.85% stake at the time — a percentage that would have been diluted since then. (Based on Warner Music, meanwhile, confirmed in August 2018 that it sold its full 4% stake for $504 million.

In March 2018 UMG committed to giving its artist a share of its Spotify profit — probably equivalent to whatever percentage royalty they are paying specific artists. Later that year, Taylor Swift revealed her new contract with the label included a condition that ensured “any sale of [UMGs] Spotify shares result in a distribution of money to their artists, non-recoupable.” Sony and Warner both paid artists a portion of their profits.

Spotify isn’t the only streaming service Universal has an ownership stake in, though. The company’s filings also revealed that it owned nearly 12.25 million shares of Tencent Music Entertainment as of Dec. 31, or 0.74% of outstanding shares.

While UMG didn’t disclose what share purchase price it paid for Tencent shares, on Dec. 31 those shares closed at $19.24. If UMG sold at that price, it would have realized $235.6 million. If UMG still holds those shares and sold at Friday’s 15.21 close price, the company would realize $186.3 million.

Source : Billboard More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

Jesy Nelson Debuts Icy Blonde Hair: See the Pics

Jesy Nelson is turning over a new page after departing from Little Mix, and it comes with a new hair color: She debuted her platinum locks Friday (May 14).

Jesy Nelson Debuts Icy Blonde Hair: See the Pics

Jesy Nelson is turning over a new page after departing from Little Mix, and it comes with a new hair color: She debuted her platinum locks Friday (May 14).

The 29-year-old singer showed off her new icy color in three Instagram pictures, captioning the first picture “No rain no flowers” before feeding her fans with subsequent glam shots in her white tank top, dark-washed Jeàn Vintage flare denim pants and purple Air Jordan 1s.

Nelson’s new look comes two weeks before she surprised fans with a “new do” that resembled Posh Spice’s iconic bob from the ’90s. Her former bandmates also paid tribute to the Spice Girls at the 2021 Brit Awards, where they made history for becoming the first female band to win the award for British group.

In their acceptance speech, Perrie Edwards, Leigh-Anne Pinnock and Jade Thirlwall called out the “white male dominance, misogyny, sexism and lack of diversity” in the music industry while giving flowers to the girl bands who came before them. “It’s for the Spice Girls, Sugababes, All Saints, Girls Aloud, all of the incredible female bands. This one’s for you!” Thirlwall added. They also thanked their former bandmate onstage.

Nelson applauded Little Mix’s big win on Instagram by posting a picture of them holding their Brit Award with a series of heart and clapping hand emojis.

See her new blonde ‘do below.

View this post on Instagram

A post shared by @jesynelson

" title="

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.