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Friday (Aug. 1) capped a bloodbath for music stocks, as a weak U.S. jobs report added to losses suffered following some of the largest companies’ second quarter earnings reports.
The 20-company Billboard Global Music Index fell 8.5% to 2,743.63 as 17 stocks lost ground and only two posted gains (one was unchanged). Four companies fell more than 10% and nine dropped more than 7%. The index’s worst week in its nearly three-year history experienced a steeper decline than the 8.2% drop in the week ended April 4, after President Trump announced steep tariffs for U.S. trading partners. In the wake of this week’s shortfall, the index’s year-to-date gain stands at 28.7%.
Stocks were down everywhere. In the U.S., the Nasdaq composite fell 2.2% and the S&P 500 dropped 2.4%. In the U.K., the FTSE fell 0.6%. South Korea’s KOSPI composite index dipped 2.4%. China’s Shanghai Composite Index fell 0.9%.
Three of the four music companies that reported earnings this week — Universal Music Group (UMG), Spotify and SiriusXM — had sizable share price decreases. The fourth, Deezer, managed a low single-digit decline.
UMG finished the week down 13.6% to 24.06 euros ($27.89). Friday’s 5.2% drop stemmed from mixed second quarter earnings results released after the close of trading on Thursday (July 31). Part of that decline could be explained by the overall market’s bad day: On Friday, the AEX, an index of companies that trade on Euronext Amsterdam, fell 1.9%.
UMG shares started the week poorly, falling 6.7% on Monday (July 28) on news that Cyrille Bolloré had resigned from UMG’s board of directors. Bolloré is chairman and CEO of Bolloré Group, which owns 18.5% of UMG’s outstanding shares, and is also the major shareholder in UMG’s former owner, Vivendi.
Some UMG investors may be worried that Bolloré may want to sell UMG shares to help the Bolloré Group’s buyout of Vivendi, which is being mandated by the French financial regulator, AMF. A major shareholder offloading shares would depress UMG’s price; however, J.P. Morgan analysts believe Bolloré “did not resign because Bollore plans to sell shares, but because he does indeed want to focus his time on Bollore Groupe, and it made sense to resign before the anticipated US listing,” analysts wrote in a note to investors on Friday.
Spotify fell 9.4% to $627.80 after the company issued lower-than-expected guidance for the third quarter. Like UMG’s results, Spotify’s second quarter was a mixed bag. Analysts noted strong user trends that were overshadowed by foreign exchange losses — Spotify reports in euros, which have gained versus the U.S. dollar this year — and stagnant average revenue per user due to a lack of price increases. Considering the fact that Spotify’s share price had been up 112% in the year leading up to Tuesday’s earnings release, a sharp pullback isn’t surprising.
SiriusXM shares fell 10.2% to $21.18 after the company continued to lose subscribers in the second quarter. Total revenue fell 2% to $2.14 billion while adjusted EBITDA dipped to $668 million from $702 million a year earlier. SiriusXM subscribers were down 460,000 from the prior-year period, although most of the decline came from paid promotional subscribers, not higher-value self-pay subscriptions. The company reiterated its full-year revenue guidance of $8.5 billion, approximately 2.3% less than 2024’s $8.7 billion.
Deezer shares fell 2.4% to 1.24 euros following the company’s second quarter earnings release on Wednesday (July 30). Revenue was flat and subscribers were down, but adjusted gross profit and net loss improved.
Sphere Entertainment Co. dropped 5.4% on Friday alone and finished the week down 6.7%. Live Nation, which reports earnings on Thursday (Aug. 7), dropped 4.4%.
Cumulus Media had the week’s best performance, gaining 7.7% to $0.14 per share. SM Entertainment was the only other music company in positive territory, with the K-pop company improving 3.8% to 129,500 KRW ($93.26), bringing its year-to-date gain to 71.3%.
Other K-pop stocks fared relatively well. JYP Entertainment fell just 1.1%; HYBE lost 2.1%; and YG Entertainment sank 4.5%.
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