Warner Music‘s shares rose 20% on Nasdaq since its debut on Wednesday. The world’s third-largest recording label sold shares in its $1.9-billion initial public offering towards the higher end of its target, as first reported by Reuters.
The deal, the biggest U.S. listing so far in 2020, marks a further sign of recovery for the U.S. IPO market, which was hampered in March by plunging stock prices caused by the COVID-19 pandemic. Also, it is a sign of recovery to the music industry, which is returning to profits with the advent of streaming.
Warner Music has been present in Latin America since the 1970s. When it was bought by Sir Leonard Blavatnik, in 2011, for $3 billion, the music industry was in the depths of a multi-year slump, but sales have improved more recently. The industry’s recovery has been helped by the rise of paid streaming services such as Apple and Spotify, and now the company is pursuing a market value of over $13 billion.
The stock opened at $27 and extended gains in early trading to $28.75. Warner, home to artists including Cardi B, Ed Sheeran and Bruno Mars, postponed the IPO pricing by a day because of the #BlackOutTuesday, a social media campaign against racism.
Reuters recalls that the music industry is seen as more resilient to weakness in the broader economy, though Warner has cautioned the outbreak has hurt physical revenue streams and delayed the release of new recordings, movies and television programs.