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STREET SMARTS: COVID-19 AND QUARTERLY RESULTS

The period between 4/1 and 6/30 is Q2 on the calendar, but it represents three months of business not as usual.  Entertainment companies are announcing their results this week and next for the period greatly affected by COVID-19-related lockdowns.  While we wait to see how companies fared, here’s a look at how stock prices have—perhaps surprisingly—risen during the period.

Even with no concerts staged, theaters closed and major albums and films delayed, all the major entertainment companies saw their stock prices rise in the quarter. The least surprising is Spotify, which will release earnings on Wednesday, as its stock price more than doubled during the stay-at-home period. It continues to rise, closing Monday at $272.50. (Another stay-at-home beneficiary, Netflix, had its revenue grow 25% in Q2 over 2019 to $6.15b as its stock price rose more than 20%). 

In recorded music, Universal Music Group parent Vivendi will report earnings Thursday. Sir Lucian Grainge’s UMG has been the French company’s crown jewel for years now, and in the quarter, which saw the stock rise 16%, the company was powered by new big sellers from The Weeknd, DaBaby, Drake, Lil Baby and Lady Gaga.

Sony, whose bottom line will be greatly affected by the absence of summer film releases, has seen its stock price rise 21.6% in the quarter, the music side led by new titles from Travis Scott, Future and Bob Dylan.

Warner Music Group, the only pure music company among the Big 3, was largely flat in the four weeks of June that followed its 6/3 IPO. Chart success in the quarter came from holdovers such as Roddy Ricch and Kenny Chesney’s latest. Both companies will issue quarterly results on 8/4.

Live Nation, which not only didn't put on a single show in the quarter but also initiated a major refund plan for canceled/postponed shows, saw its stock rise 14%. Multiple analysts have been bullish on the steps Michael Rapino’s company has taken to strengthen its balance sheet, preparing for the return of shows—and ticket buying—in 2021 and 2022.

iHeartMedia, which will announce results on 8/6, rose to $8.35 from $6.34 in the period.

SiriusXM, whose success have been connected with car listening, and its Pandora unit sailed steadily through the period and, despite the closure of theme parks and no theatrical movie releases, Disney and NBCUniversal parent Comcast have seen their stocks glide upward. On the tech side, Google/YouTube parent Alphabet was up more than $300 a share in the quarter and Apple, which announces results Thursday, was up more than $120 per share.

Amazon, which also announces results on Thursday, saw unprecedented growth in the quarter as its stock price rose more than $800 a share to $2,758.82 from $1,907.70. 

The chart below shows each stock's price on 4/1 and 6/30. WMG's numbers are for 6/3 and 6/30. 

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