The value of music: Hipgnosis’ share price is now HIGHER than it was pre-COVID-19

It’s been a better week so far, generally, for the stock market.

The UK’s FTSE 100 has bounced 13.9% from its Monday close to end of trading today (March 25), while the S&P 500 in the United States was up again slightly (+1.15%) today.

The past month, though, has been a relentlessly brutal period for your typical share price – for obvious reasons.

The first confirmed case of a novel Coronavirus infection in the United States was reported on January 20.

Three weeks later, on February 11, at a global press conference, the World Heath Organization gave the virus its name: COVID-19.

From then to now, over a quarter (-27%) of the value of the S&P 500 – representing the share prices of 500 of the USA’s biggest companies – has been wiped out, even allowing for this week’s mini-recovery.

By way of example: the share price of Live Nation, whose market cap is springing back this week after a recent pummelling, is down 37% from close on February 11 to now.

All of which puts into perspective the remarkable trajectory of the UK-based acquisitive music rights company, Hipgnosis Songs Fund, on the London Stock Exchange during this period.

Like many stocks, Hipgnosis – which trades as SONG on the LSE – took a hammering as the spread of COVID-19 rose to the top of the global news agenda: from LSE close on Friday, February 21 to Tuesday, March 17, the firm’s share price shrunk all the way from 108.00 to 87.50, a fall of 19%.

Yet since that March 17 low point, the value of SONG has rocketed back up.

Today (March 25), has seen a particularly vertiginous rise, with SONG’s share price up 12.95% at close on the LSE (versus yesterday) to 109.00.

The kicker: that 109.00 stock price is higher than Hipgnosis’s equivalent figure at both the end of January (Jan 31, 108.00) and the day COVID-19 was officially born (Feb 11, 107.00).

Talking to MBW at market close today, Hipgnosis founder and CEO Merck Mercuriadis said: “This is the power of great songs and music.

“A key part of what we have demonstrated to our tremendous supporters in the financial community is that music is always being consumed. If you’re celebrating, the soundtrack is music; if you are experiencing challenges – as we all are right now – you are getting through them with music.

“This is a testament to songs as an asset class and the incredible songwriters all over the world. They really do help the world go round.”

“This is the power of great songs and music.”

Merck Mercuriadis, Hipgnosis

UK-based Hipgnosis, which floated on the London Stock Exchange in 2018, was added as a constituent of the prestigious FTSE 250 Index on March 20.

The FTSE 250 is the sibling of the FTSE 100, consists of the 101st to the 350th largest companies listed on the London Stock Exchange.

Hipgnosis has spent over $650m on catalogs so far, mainly in the publishing and production space.

These catalogs have included hits recorded by the likes of Adele, Beyoncé, Ed Sheeran, Camila Cabello, Rihanna (pictured) and others – via deals with the likes of The-Dream, Starrah, Tricky Stewart and many more.

In December, Hipgnosis acquired a 100% share of catalogs from both Shape Of You co-writer Johnny McDaid (covering 164 songs) and super-producer Jeff Bhasker (436 songs).

That was in addition to a 99% share of a catalog of 188 songs from Jack Antonoff – the Taylor Swift, Sara Bareilles and Lorde collaborator (and member of Fun.).

[The S&P 500 and Live Nation numbers in this story were updated at market close on March 25]Music Business Worldwide

Related Posts