Thu. May 23rd, 2024

HYBE Stock Rocked by ADOR CEO Controversy, Spotify Shares Hit Highest Mark in Three Years

By Michael Apr 27, 2024

HYBE was rocked by controversy this week after an audit of one of its subsidiary labels, ADOR, allegedly revealed that the label’s CEO, Min Hee-jin, “deliberately led the plan to take over management control of the subsidiary,” according to a statement sent by the company on Thursday (April 25).

Shares of HYBE fell 7.8% on Monday (April 22) and ended the week down 12.6% to 201,500 won ($146.22). HYBE later reported Min, who owns an 18% stake in ADOR, to the police for “breach of trust and other allegations” and asked her to step down, it said in the April 25 statement. The dispute added to HYBE’s losses at a time when most music stocks are faring well. HYBE shares have fallen 13.7% year to date and 25.4% over the last year.

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HYBE was the biggest loser in a week most music companies’ stocks were up. In fact, five music companies’ stocks posted double-digit gains this week and only 7 of the 20 stocks in the Billboard Global Music Index were losers. The index gained 3.2% to 1,756.98, breaking a two-week losing streak and bringing its year-to-date increase to 14.5%. 

The week’s greatest gainer was streaming company LiveOne, which increased 14.5% to $1.90 after it provided two updates to upcoming earnings releases. On Monday, the company announced that it expects fiscal 2024 revenue of $118.5 million, up 19% from $99.5 million the previous year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $14.4 million — about 32% above $10.9 million of EBITDA in the prior year. On Wednesday (April 24), LiveOne announced that PodcastOne expects revenue of $11.7 million in the fiscal fourth quarter 2024, up 32% year over year. LiveOne spun off PodcastOne in 2023 and retained an 81% stake.

Two of the weeks’ best-performing stocks also reached their highest levels in years. Reservoir Media improved 13.8% to $9.10, its highest closing price since the stock closed at $9.20 on May 4, 2022. Chinese music streamer Tencent Music Entertainment gained 13.5% to $12.88, its best closing price since it closed at $13.02 on July 13, 2021. 

Hipgnosis Songs Fund (HSF) gained 12.9% to 1.038 pounds ($1.30) as Concord and Blackstone vie for control of the company’s share equity and 65,000-song portfolio. Notably, Friday’s closing price was 5 cents, or 4%, above Concord’s high bid of $1.25 per share, suggesting that some investors expect the bidding process to continue. As the HSF board weighs its options amidst a strategic review and building strife with its investment advisor, Hipgnosis Song Management, a sale seems inevitable. “I think investors have been through such a roller coaster most of them just want their money back,” Round Hill Music CEO Josh Gruss told Billboard this week.  

Spotify’s stock closed Friday up 5.0% to $289.59 after an up-and-down week. Shares rose 11.5% on Tuesday — and posted an intraday gain of 19.2% — following the release of the company’s first-quarter earnings report but gave back nearly all the gains over the next two days by falling 6.8% and 2.3% on Wednesday and Thursday, respectively. 

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Tuesday’s (April 23) intraday high of $319.30 was Spotify’s highest share price in over three years. The last time Spotify traded above $319.30 was Mar. 8, 2021, when shares reached $323.04. The stock dropped below $100, to $96.67, on Apr. 27, 2022, and fell as far as $69.29 on Nov. 4, 2022. Since that low point a year and a half ago, as Spotify has cut its workforce and focused on improving margins, its share price has risen 218%. 

Indexes around the world posted gains this week. In the United States, the Nasdaq was up 4.2% to 15,927.90 and the S&P 500 improved 2.7% to 5,099.96. Both indexes were helped by Alphabet, which rose 10% to $173.69 on Friday after releasing first-quarter earnings and announcing a $70 billion buyback program. In the United Kingdom, the FTSE 100 rose 3.1% to 8,139.83. South Korea’s KOSPI composite index gained 2.5% to 2,656.33. China’s Shanghai Composite Index rose 0.8% to 3,088.64. 

By Michael

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