Shares of Warner Music Group rose sharply on their trading debut on Wednesday.
The stock opened at $27 and was up about 15%, to $28.85 in midday trading on the Nasdaq market.
Earlier, Warner Music had priced an offering of 77 million Class A shares at $25 a share. That was in the middle of the initial public offering’s projected range of $23 to $26. The size of the offering has been expanded from an originally expected 70 million shares.
All of the proceeds will go to Access Industries, a company controlled by the Russian-born, U.K.-based billionaire investor Leonard Blavatnik.
The stock trades under the ticker symbol WMG. That is the same ticker the company was using before Access bought the company for $3.3 billion in cash in 2011. Once part of Time Warner, Warner Music was acquired in 2004 for $2.6 billion by a group of investors led by Edgar Bronfman Jr., and then taken public as a stand-alone company for the first time in 2005.
Underwriters for the new offering include Morgan Stanley, Credit Suisse, and Goldman Sachs.
After the offering, according to the company’s S-1 filing with the Securities and Exchange Commission, Warner Music will have 510 million shares outstanding, 440 million of which are in the form of supervoting Class B shares entitled to 20 votes per share. Almost all of those are controlled by Access and Blavatnik. At $25 a share, the company was valued at $12.8 billion.
Warner Music had revenue for the September 2019 fiscal year of $4.48 billion, up 12.7% from fiscal 2018. Net income for fiscal 2019 was $256 million, or 51 cents a share, down from $307 million, or 61 cents a share, a year earlier.
For the six months ended March 31, revenue was $2.33 billion, up from $2.29 billion in the comparable year-earlier period, while net income was $46 million, or 9 cents a share, down from $153 million, or 30 cents.
For the March quarter, revenue was $1.07 billion, down from $1.09 billion a year earlier. The company had a loss in the latest quarter of $74 million, or 15 cents a share, against a profit of $67 million, or 13 cents, in the previous year’s period.
Warner in the S-1 filing also provided financial performance data on the month of April alone.
Warner’s April revenue was $295 million, down from $335 million, or $329 million in constant currency, a year-over-year decline of about 10%. Streaming revenue for the month was up 12% to $183 million, versus $168 million in April 2019, the company said, and music publishing revenue in the month was $22 million, up from $19 million.
Meanwhile, ZoomInfo on Tuesday raised the projected price range for its IPO, which is expected to price late Wednesday and open for trading on Thursday. The company now estimates the range at $19-20 a share, above the original “price talk” range of $16 to $18.
The ZoomInfo offering is for 44.5 million Class A shares. ZoomInfo, a Vancouver, Wash.-based provider of databases used by sales and marketing teams, is controlled by a group of private-equity investors, including TA Associates, Carlyle, and 22C Capital. At the middle of the new range, the stock would have a market capitalization of $7.5 billion. ZoomInfo will trade on Nasdaq under the symbol ZI.
And there are other IPOs coming.
On Monday, Shift4 Payments, an Allentown, Pa.-based payment processing company, set a range of $19 to $21 a share for a planned offering of 15 million Class A shares. Shift4 plans to list on the New York Stock Exchange under the symbol FOUR.
And Vroom, an online used car market, set an expected price range of $15 to $17 a share for an offering of 18,750,000 shares; the company expects to trade on Nasdaq under the symbol VRM.
Both Shift4 Payments and Vroom are likely to reach the public markets next week.
Write to Eric J. Savitz at eric.savitz@barrons.com
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