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TALKING A GOOD GAME: TAKING STOCK IN PODCASTS

SiriusXM is positioned to make a headfirst dive into podcasting with the acquisition of E.W. Scripps Co.’s Stitcher, assuming a strategy that has been a life saver during the pandemic for fellow streaming service Spotify.

The Wall Street Journal reported that the deal would be worth about $300m, and would make SiriusXM a major player in the space dominated by Spotify, iHeartMedia and Apple. Stitcher handles podcast production, distribution and advertising. 

SiriusXM, which has a market cap of $25.71b, was predicting a significant dip in revenue during the second quarter of this year due to the COVID-19 pandemic’s affect on daily lives. Reduced time in cars means fewer listening hours and users on SiriusXM’s satellite radio and advertisers were dramatically cutting spending across the board, affecting the company’s Pandora unit. Sirius XM generates more than 80% of the company’s revenue with Pandora generating the rest. A push into podcasting, theoretically, would broaden Sirius XM’s reach in the home.

How exactly the pandemic affected the company will become known 7/30 when its Q2 numbers are released. Since shutdowns took effect across the country the third week of March, SiriusXM’s stock price has risen but remained relatively steady in the $5.80-$6.05 per share ballpark since late April.

iHeart, which bills itself as the #1 commercial podcast publisher globally, saw its stock rise to $10.61 in early June from $6.38 on 3/24. It has since settled in around $7 a share.

The lockdown has greatly benefited companies that focus on the home over motor vehicles and the office. Spotify posted it highest closing price ever on 7/2—$271.49—as investors became free-spenders after a positive jobs report and the planned re-openings of New York and New Jersey.

When shut downs were being formulated, Spotify dipped to $118.87 on 3/17. One announcement after another has bolstered its price: After Q1 results were announced it went to $155.78; a podcast deal with Joe Rogan drove it to

$175.03 in mid-May and a week later it was at $191.31. A 6/17 podcast deal with Kim Kardashian pushed it to $199.83 and two weeks later it was nearing $275 a share.

That spike aligns with Netflix’s run—$298.84 on 3/16 to a few trades over $500 on Monday and a close of  $493.81. As much as streaming helped save the recorded music business, podcasts appear to be the pots of gold that keep the streamers afloat.

In late April, Liberty Media moved its 33% stake in Live Nation under the same umbrella as SiriusXM so it is tracked as the Sirius XM/Live Nation/iHeart/Atlanta Braves group.

Tuesday it opened at $35.53. On  3/18, it was $18.08 a share, sans Live Nation, and shot up significantly to $30.36 on 4/29. On 6/22, it reached $36.74.

 The major recorded music companies have all seen stock prices hold steady and even rise even as superstar releases have been delayed, tour-related revenue eliminated and marketing efforts restricted. When Tencent bought 10% of Universal Music earlier this year for $3.3b, the music company had a $30b valuation. Considering its proven resiliency, what is its value today as parent Vivendi continues to eye an IPO for the unit?   

Other stock performances since the lockdowns began in mid-March:

Vivendi (parent of Universal Music Group, which generated about 46% of Vivendi’s revenues in 2019)
Market cap: $35.4b
Opened Tuesday at $26.57
3/16 - $19.85
5/21 – $21.61
7/6 - $26.49 

Sony Corp.
Market cap: $88b
Opened Tuesday at $69.82
3/16 – 51.68
5/21 - 65.97
6/25 - 71.64 

Warner Music Group
Market cap: $15.4b
Opened Tuesday at $29.52
6/3 - $30.12 (first day of trading)
6/19 - $32.86

SiriusXM
Market cap:$25.6b
Opened Tuesday at $5.89
3/20 - $4.44 per share
4/29 - $5.92
6/8 - $6.52

iHeartMedia
Market cap: $466m
Opened Tuesday at $6.94
3/24 - $6.38
6/5 - $10.61
6/24 - $9.69

Spotify
Market cap: $49.2b
Opened Tuesday at $256.43
3/17 - $118.87
5/19 - $175.03
6/17- $199.83
7/2 - $271.49 (Highest closing price; markets buoyed by re-openings of NY and NJ and new jobs report)

Apple
Market cap: $1.63t
Opened Tuesday at $376.66 (all time high due to iPhone manufacturing plan announcement)
3/23 - $224.37
6/10 - $352.84 

Netflix
Market cap: $217.4b
Opened Tuesday at $496.81
3/16 -  $298.84
4/16 - $439.17
7/6 – $493.81

Amazon
Market cap: $1.52t
OpenedTuesday at $3,058.55
3/16 - $1,689.15
4/16 – 2,408.16
7/6 - $3,057.04

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