Hi Friends,
Warner Music Group (Ticker: WMG) went public today so I thought I would share a little about this finance news. The IPO was at $25, and they raised almost $2 billion in the offering before going public today. Once the trading started, the shares quickly rose above the IPO price before closing at +20% for the day:
Warner Music Group is the parent company owning some big music names, including Ed Sheeran, Bruno Mars and Katy Perry. It is unclear to me what the $2 billion raised will be used for, but my guess is additional artist acquisitions or the purchase of other music labels.
IPOs are heating up right now, but recent history has shown investing in IPOs to be more risky than historically normal. The private financing rounds have been expensive and large, so once these companies finally do go public, the private rounds are eager to exit and often drive the newly listed stock well below its IPO price when trying to cash out.
I will be watching this one from the sidelines at the moment, but love when more companies become available to the public for investment.
Do you have any thoughts on this new IPO?
Thanks for coming by today,
Brian