Warner Music Group Corp, the world’s third-largest recording label, yesterday said that its upsized initial public offering (IPO) raised US$1.93 billion, the biggest US listing so far this year.
The company increased the offering to 77 million class A shares at US$25 per share, valuing it at US$12.75 billion. It had initially proposed offering 70 million shares.
The entire offering comprises existing investors selling stock.
Warner Music, home to artists such as Cardi B, Ed Sheeran and Bruno Mars, had set a target range of US$$23 to US$26 per share.
The upsized offering points to improving appetite for new issues, which came to a halt in March as stocks plunged following the global spread of COVID-19.
Warner Music had planned to price the IPO on Tuesday, but postponed by one day to mark #BlackOutTuesday, a social media event to show support for racial justice.
The music industry is seen as more resilient to weakness in the broader US economy, although Warner Music has cautioned that the pandemic has hurt physical revenue streams and delayed the release of new recordings, movies and television programs.
Warner Music, majority owned by billionaire Len Blavatnik’s Access Industries Inc, posted net loss of US$74 million in the second quarter that ended on March 31, compared with a profit of US$67 million a year earlier. Its debt totals US$2.98 billion.
With companies and investors unable to meet in person due to the COVID-19 outbreak, Warner Music is the latest firm to complete its IPO through a virtual roadshow.
Virtual roadshows have meant that companies have been able to complete their IPOs in as little as four days.
The shorter roadshows have also served as a hedge against volatile financial markets.
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