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IPO Warner Music

Leading music company
IPO
Medium risk

Revenue in 2017-2019

Invest in IPO Warner Music

This investment idea is no longer available. New applications are not accepted

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Investment Idea Details
The Company

Founded in 1958, Warner Music Group is an American multinational entertainment, and record label conglomerate headquartered in Los Angeles. It is a music company with the interests of recording and publishing music, and artist services. The company operates in two segments, Recorded Music and Music Publishing.

The Recorded Music segment is involved in the discovery and development of artists, as well as the related marketing, distribution, and licensing of recorded music produced by such artists. This segment also specializes in marketing its music catalog through compilations and reissuances of previously released music and video titles. The Music Publishing segment owns and acquires rights to approximately one million musical compositions comprising pop hits, American standards, folk songs, and motion picture and theatrical compositions.

Market Opportunity

The recorded music industry generated $20.2 billion in global revenue in 2019 and has consistently grown since 2015, according to IFPI. During the one month ended April 30, 2020, Warner Music experienced a 12% increase in Recorded Music streaming revenue, their largest and fastest-growing source of revenue, despite the impact of COVID-19 on digital advertising markets.

Digital is the largest, generating $12.9 billion of revenue in 2019, representing 64% of global recorded music revenue. Within digital, streaming generated approximately 88% of revenue, or $11.4 billion, with the remainder of digital revenue coming from other formats such as downloads.

According to Music & Copyright, the music publishing industry generated $5.6 billion in global revenue in 2019, representing an approximate 2% increase from $5.5 billion in 2018. The main drivers for this expected growth are the rise in digital technologies as the primary means through which musical entertainment is both produced and consumed. Management says its market ranking was #3 in both the recorded music market and music publishing market.

Risks

Warner Music results of operations, cash flows and financial condition are expected to be adversely impacted by the coronavirus pandemic. For instance, the lockdown has ended live concert tours, adversely impacting concert promotion business and sale of tour merchandise.

The company may be be unable to compete successfully in the highly competitive markets in which they operate, and they may suffer reduced profits as a result.

Warner Music prospects and financial results may be adversely affected if they fail to identify, sign and retain recording artists and songwriters and by the existence or absence of superstar releases.

Financials

Recorded Music business, home to superstar recording artists such as Ed Sheeran, Bruno Mars and Cardi B, generated $3.840 billion of revenue in fiscal 2019, representing 86% of total revenues. Music Publishing business, which includes esteemed songwriters such as Twenty One Pilots, Lizzo and Katy Perry, generated $643 million of revenue in fiscal 2019, representing 14% of total revenues.

The firm has a history of high operating cash flow and most recently, $330 million in free cash flow over the past twelve months.

Warner Music (WMG) plans to raise $1.7B by offering 70 million shares at a price range of $23 to $26. At the higher end of the proposed range, WMG would command a fully diluted market value of $13.2 billion. Given strong financial results (especially high cash flow yield) along with solid market positioning, we estimate that WMG market cap after an IPO will be around $17B. The expected return on investment is medium (40% or less).

How IPO Investments Work
1. Collection of funds

2-3 weeks before the start of the company publishes information about the opening of trading: financial statements for 3 years, a description of the company's business, plans for the future, as well as the risks that management sees in their own business. We analyze such offers and publish the best ones. Investors apply for deposits. Before the deadline for applications, you can change the request or cancel it.

Publication
28 May
Threshold amount
$50
2. Buy shares

We submit one large application for the purchase of shares by pre-subscription with reduced price to large investors. The application may be rejected in part or in full. Over the past three years, our applications have been rejected only three times. The next day, or every other day, we'll know at what price and at what percentage the order is executed, and we'll post it on «The my investment page».

Submit applications before
01 Jun
3. Start Bidding

The price of shares is rising from the first day due to the demand of investors deprived of the opportunity to buy shares before trading. Most of the stocks we've been recommending buying over the past three years have been starting to trade on the stock exchange at tens of percent higher than the price at which customers bought the shares. There comes a Lock up period when it is forbidden to sell shares purchased by subscription. Typically lasts 3 months.

Start Bidding
03 Jun
Return forecast
Medium (up to 40%)
4. Receiving profit

After the expiration of the Lock Up period, the investment is automatically closed and the investor receives a profit on account of the deduction commissions UT. You can always view the results of your past investments in investment archive.

End
07 Sep
Early profit fixation

Although no shares are allowed to be sold during the lock-up period, our traders seek to offer investors fixed profit by way of using various financial instruments, including forwards, options, short positions etc.

From the investor’s point of view this means that he or she may close an investment by paying a certain part of its value (as a rule, approximately 15 percent). This is due to high prices for the instruments which are employed to ensure availability of fixed profit. As such, you shall press any relevant button in the Investor Account as soon as it is active.

The closing procedure is similar to commencement of investment business. You shall file a bid which is executed within a business day by UT. So, your investment is closed at the price currently prevailing on the stock exchange. However, we rarely recommend using this feature, since upon expiry of an applicable lock-up period the average performance is higher.

Fee

FOR ENTRY

3 per cent of the share price. This fee is charged as soon as your investment bid is confirmed.

FOR EXIT

1.75 per cent of the purchase price paid for your shares as soon as trading is closed. This fee is charged upon closure of any relevant investment.

SUCCESS

20 per cent of the profit your derive. This fee is charged only if you show positive performance as of the moment any relevant investment is closed.

TO EARLY EXIT

Usually, 15 per cent (depends on the stock exchange environment). It is calculated per each investment individually.

Advantages Enjoyed by Those Investing with United Traders

RELIABILITY

Our risk managers ensure proper support throughout the entire transaction. Moreover, you may call them on +7 495 646-15-57 or 8 800 333-66-81 or visit our office, if a more detailed discussion is needed.

IN THE PROFIT FROM THE FIRST DAY

Such an approach allows it to limit extra risks related to bankruptcy of start-ups and considerably increase profit vs investors purchasing shares on open Market.

LOW ENTRY THRESHOLD

Millions of dollars are required to buy shares on a subscription basis. We have generated a pool of traders and investors which enables any newbie to participate in any transaction as aforesaid by investing just USD50 or more.

Invest in IPO Warner Music

This investment idea is no longer available. New applications are not accepted

View more ideas