Despite a week characterized by minimal news and a lack of significant regulatory filings, music stocks concluded the last full week of 2024 with a downward trend, marking a decline for the third consecutive week. The 20-company Billboard Global Music Index (BGMI) saw a decrease of 0.6%, landing at 2,155.51, which has now reduced its year-to-date gain to an impressive 40.5%. This index has faced a cumulative drop of 5.5% over the past three weeks, following a robust 14.6% increase during a six-week winning streak. Out of the companies monitored, six enjoyed positive stock performance, while 13 saw their values decline, and one remained unchanged.
Amidst this volatility, two of the three leading music labels emerged as notable winners for the week. Universal Music Group experienced a rise of 1.4%, reaching 24.70 euros ($25.75), while Warner Music Group saw a 0.9% increase, closing at $31.45. Additionally, iHeartMedia posted a gain of 1.1%, reaching $1.91. This uptick followed the company?s significant announcement on December 23, regarding the successful completion of a debt exchange that effectively reduced its long-term debt by a substantial $440 million while extending the maturity dates of its obligations.
In contrast, independent music companies faced declines across the board. Reservoir Media fell by 4.3% to $8.86, while Believe experienced a 4.0% drop, settling at 13.78 euros ($14.37). Notably, all four major South Korean companies in the industry also reported losses: YG Entertainment dropped 2.6%, HYBE decreased by 2.5%, JYP Entertainment lost 2.0%, and SM Entertainment slipped 1.6%. This trend illustrates the challenges faced by independent and international players in a fluctuating market.
Spotify, recognized as the most valuable music company within the BGMI, saw its stock price decline by 0.8% to $456.48, marking its third consecutive week of losses. Since hitting an all-time high of $506.47 on December 4, the stock has decreased by 9.9%. Despite this recent downturn, Spotify remains the top-performing music stock of 2024, boasting a remarkable 143% increase this year, even with only two trading days left in the calendar year.
In other stock market updates, Tencent Music Entertainment (TME), a key player in the Chinese music streaming sector, experienced a decline of 1.8%, bringing its share price down to $11.72. However, on Friday, 86Research upgraded TME to a ?buy? rating, setting a price target of $14. This positive outlook is noteworthy considering that shares of TME are up 30.1% year to date, highlighting its resilience in a competitive landscape.
SiriusXM emerged as the week?s most significant loser, plummeting 8.6% to $21.13. This stark decline is indicative of the company?s struggles, as SiriusXM has faced a staggering 61.4% drop in stock value throughout 2024, making it the second-worst performer among BGMI stocks, just behind Cumulus Media, which has seen an even steeper decline of 86.5%. Such dramatic shifts raise concerns about the future trajectory of both companies in the evolving music industry.
Overall, music stocks have underperformed compared to global market indices. In the United States, the Nasdaq composite index increased by 0.8%, while the S&P 500 climbed by 0.7%. Across the pond in the United Kingdom, the FTSE 100 improved by 0.8%. Meanwhile, China?s Shanghai Composite Index rose by 1%, and South Korea?s KOSPI composite index remained unchanged after a series of declines in three out of the previous four weeks. This disparity highlights the unique challenges faced by the music sector amidst broader economic trends.
