New York — Warner Music Group, one of the globe’s “big three” recording companies, said on Wednesday that it raised more than $1.9bn in an initial public offering (IPO) that underscores how streaming has re-invigorated the industry.
Warner stock is expected to start trading later Wednesday on the Nasdaq under the ticker WMG after the IPO was priced at $25 a share. The company increased the offering to 77-million shares from the 70-million initially envisioned, making it the biggest IPO of 2020 according to Renaissance Capital.
The Wall Street unveiling represents yet another chapter for a company with a storied history in the recording industry, a sector that has taken its knocks, most recently from the coronavirus, which has obliterated live entertainment for the time-being.
The Covid-19 pandemic also delayed the company’s IPO, which was originally scheduled for February. However, Tuesday’s IPO reflects how streaming music has revived an industry and also comes amid a decisive upswing in the broader stock market.
Access Industries, a group of investors headed by billionaire Len Blavatnik, which acquired Warner Music for $3.3bn in 2011, will retain its majority stake in the company.
Warner is the home of artists such as Cardi B and Ed Sheeran and holds the lucrative back catalogues from the likes of Madonna. It also owns and operates some of the world’s most successful labels, including Atlantic Records, Elektra Records, Warner Records and Parlophone.
The company is riding the streaming wave, a major revenue source for record companies and publishers even as artists complain of measly royalties. In April, Warner Music saw a 12% jump in streaming revenue, which accounted for more than half its $4.5bn in revenues in 2019.
Ups and downs
Film mogul Jack Warner founded the Music Publishers Holding Company to provide cheap access to music for his films in 1929.