How did Warner Music Group has a 10b USD increase in 2021?

It is still pandemic. Face-to-face contact is still not yet possible in many lands. Bookings as well as face-to-face concerts are still a no-no. Yet, Warner Music Group still managed to garner some $ 10 B when it comes to earnings. Warner Music Group is a prestigious Group when it comes to the music industry. How was that possible? Let us take a look at their secrets on how they have managed to have that happen.

Stock Market.

News have it that Warner Music Group engaged in the stock market. News have reported that Warner Music Group has engaged in stocks trading. This is together with other music groups. Because of this trading, they were able to raise their funds to USD 10 B.

Here is the update:

Last October 21, WMG floated a part of its company with a share price of $ 48.06. This is, the highest point since WMG floated a part of its company on NASDAQ last June 2020.

A source indicated that Warner Music Group’s share price last October 20 was Enterprise Value of $ 27.66 B.

(The theoretical price that a company would cost to buy is Enterprise value. It also takes into account both debt and cash on a firm’s books.)

Strong Performance

A music company in the US – Universal Music Group – is performing very good. This means it has a strong presence in the music industry. Because of its strong presence, Warner Music Group’s value growth is playing on. It grows with the growth of Universal Music Group.

Enterprise Value and Pershing Square

Here is the update:

There has been a surge when it comes to Warner’s value since Universal floated in Amsterdam. This is something to check out. Warner Music Group’s EV grew by a full $ 4B in the past month alone.

According to ycharts, when Warner Music Group’s firm floated on NASDAQ last June 2020. Its EV stood at $17.88 B. And by October 21, 2020, this EV had fallen to $17.18 B.

Warner’s EV has shot up to $10 B in that long expanse of time. Universal Music Group’s own floatation and Warner’s valuation vs. UMG drives this.

All these they owe to Mr. Bill Ackman. He is the billionaire whose Pershing Square controls 10% of Universal Music Group.

Streaming Acceleration

A source reported that Warner Music Group has been streaming this 2021. This gives them propelled revenue.

They also produce new music despite the pandemic giving them some streaming revenue. They also found new streaming platforms that is why their revenue went up.

They also have strong operating leverage. That is why they have margin expansion and high operating cash flow conversion.

Here is the update:

Propelled by streaming acceleration and partial recovery in certain COVID-Impacted areas. Total revenue grew to 27%.

Chart-topping new music made their streaming revenue grow up to 27%.

They have emerging streaming platforms. That is why they have robust growth in revenue.

Strong operating leverage drives their margin expansion and high operating cash flow conversion.

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