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Saudi Arabia took a $500M stake in Live Nation on Monday. Presumably, to get first dibs at tickets when The Jonas Brothers go back on tour.
The Saudi Sovereign Wealth Fund acquired the shares on the open market, as it was reported that Live Nation management was in the dark about the Kingdom's plans. Seems like that's kinda how Saudi Arabia rolls.
The investment amounts to a 5.7% stake in Live Nation, which makes the Saudis the third-largest shareholder, behind Liberty Media Group and Vanguard. Two companies that scream 'rock and roll.'
The 'rona boi
Live Nation, which owns Ticketmaster, has been particularly affected by lockdowns, as concerts and gatherings have been canceled or postponed well into the foreseeable future. As of March 31, the event-promoter had sold 45M tickets for shows in 2020, but those tickets are about as useful as a coupon to Circuit City right about now.
LN’s latest press release stated that in the last two weeks of March (since 'rona kicked off its world tour), eight thousand shows have been impacted by event stoppages, with 90% "postponed" and the remaining 10% of shows canceled.
The ticket-price-gouger, however, claims that it has enough cash on hand to make it through the year. Glad to see those service fees and convenience charges are being put to good use. It’s also looking to stretch its piggy bank by implementing a hiring freeze, furloughing employees and reducing top executive pay by 50%. Plus Live Nation's CEO Michael Rapino has given up his salary for the year.
$LYV has halved YTD, but the news sent shares up 12% to $42.86.
The bottom line...
Saudi Arabia has taken ‘buy the dip’ to heart, opening its pocketbook to buy battered shares across industries.
In April, Saudi Arabia sprung for an 8.2% stake in Carnival Cruise Lines, making it the second-largest shareholder behind chairman, Micky Arison. Shares were down roughly 75% at the time of purchase but rallied 30% on the day of the announcement.
The Public Fund is also in the final stages of buying an 80% stake in Newcastle's football club.
Zoom’s Good Week Ends on Sour Note After Facebook Crashes Party [Bloomberg]
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