Live Nation Stock Sinks on Antitrust News, Hipgnosis Shares Soar After Takeover Bid

Live Nation shares fell 10.9% to $89.98 this week after The Wall Street Journal reported the U.S. Department of Justice plans to file a lawsuit against the company in the coming weeks. The DOJ could seek any number of remedies, but, in recent years, there have been calls from both the public and private sectors to break up the company and separate the concert promotion business from the ticketing business. 

In February, Senator Amy Klobuchar, who helped organize the Jan. 2023 Senate hearing at which Live Nation president/CFO Joe Berchtold testified, called on lawmakers to “update and enforce antitrust laws” to prevent Live Nation and Ticketmaster from working on concert to “keep ticket prices high.”

“This merger never should have been allowed to happen,” Klobuchar wrote on X in February. “Break them up,” Senator Alexandria Ocasio-Cortez wrote in November 2022 following the Taylor Swift pre-sale fiasco. Likewise, the American Economic Liberties Project and the American Antitrust Institute have both called for the DOJ to break up the company. 

Live Nation shares have fallen 15.1% in the four weeks since the week ended March 22 but remain up 34.3% year to date. The company will report first-quarter earnings on May 2. 

The large declines seen among some of the most valuable music companies caused the Billboard Global Music Index to drop 4.5% this week — its largest one-week loss since November 2022. That brought the index’s decline over the past two weeks to 7.5% after it reached an all-time high the week ended April 5. 

Major stock indexes also suffered substantial losses this week. The tech-heavy Nasdaq composite fell 5.5% to 15,282.01 as video streaming giant Netflix and chipmaker Nvidia fell 9.1% and 10%, respectively, on Friday (April 19). The S&P 500 dropped 3.0% to 4,967.23. In the United Kingdom, the FTSE 100 fell just 1.2% to 7,895.85. South Korea’s KOSPI composite index lost 3.4% to 2,591.86. China’s Shanghai Composite Index was an outlier, rising 1.5% to 3,065.26.

Radio giant iHeartMedia had the biggest decline of the week after dropping 12.8% to $1.90. That brought the company’s year-to-date loss to 28.8% and its 52-week decline to 54.3%. Music streaming leader Spotify suffered the largest drop in terms of lost market capitalization, however, after an 8.2% decline, to $275.79, raised $4.9 billion of market value. Spotify will release first-quarter earnings on Tuesday (April 23). 

Hipgnosis Songs Fund shares predictably surged this week on news that Concord has offered to acquire the company for $1.4 billion, or $1.16 (0.94 pounds) per share. The stock finished the week up 24.2% to 0.919 pounds ($1.14), just under Concord’s offer price. The board encouraged shareholders to accept Concord’s bid, which was a 32.2% premium over the prior day’s closing price. That would provide immediate returns, the board explained, because the company needs “substantial financial and governance changes to improve its financial performance” that will suppress the share price in the meantime.

The other big gainers for the week came from South Korea. HYBE gained 8.2% to 230,500 won ($167.70) and SM Entertainment rose 4.0% to 78,100 won ($56.82). Year to date, HYBE is down 1.3% and SM Entertainment is off 15.2%.