Tencent acquires stake in newly public Warner Music Group
- At current prices, Tencent’s investment is worth more than US$246 million
- The music industry is enjoying a long-running financial renaissance, thanks to the popularity of streaming services
Tencent Holdings acquired a 10.4 per cent stake in the class A shares of Warner Music Group Corp, a bet on the industry’s long-term growth prospects following the US music label’s US$1.9 billion initial public offering last week.
At current prices, Tencent’s investment is worth more than US$246 million. That represents a quick gain from the initial price of US$25 a share that Warner Music fetched last week in its IPO.
Tencent to invest US$70 billion in new digital infrastructure, backing Beijing’s economic stimulus efforts
Warner Music is controlled by billionaire Len Blavatnik through his ownership of Class B stock with super voting rights. Including all of the classes of stock, the company holds a 1.6 per cent stake.
The music group is the only separately traded major US label. The largest, Universal Music, is owned by Vivendi, followed by Sony Corp’s Sony Music Entertainment.
The industry is enjoying a long-running financial renaissance, thanks to the popularity of streaming services like Spotify Technology and Apple Music from iPhone maker Apple. Warner Music’s sales grew 12 per cent last year.
Shares of Warner Music rose 2.6 per cent to US$30.77 in New York. The stock has gained 23 per cent from the offering price.