UMG CEO Lucian Grainge
Source: Getty Images

Universal Music Group Stock Forecast as Stock Makes Public Debut

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Sep. 21 2021, Published 2:30 p.m. ET

Universal Music Group is the world’s leading music company. It's home to some of the biggest artists in the world. Some of the biggest labels are either owned or have partnered with Universal Music Group including Def Jam Recordings, Motown Records, Republic Records, Virgin Music, and Cash Money Records.

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Over the years, UMG has had some of the most historic artists under its label including Beyonce, Justin Bieber, Elton John, and Michael Jackson. Spanning the decades it has been around, the company has been able to keep up with trends and capitalize on the music industry’s shift to focusing on streaming. UMG, Sony Music Group, and Warner Music Group have been widely regarded as the “The Big Three.” They are the biggest music labels in the world and have changed the landscape of music.

We’ve seen companies in the music industry have success going public in recent years, like Spotify and Warner Music Group. WMG just went public in June 2020 and its stock price has already gone up over 50 percent since then. With Universal Music Group going public on Sept. 21, it hopes the stock will have success like WMG.

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UMG chairman and CEO Lucian Grainge
Source: Getty Images

Universal Music Group IPO details

French media company Vivendi gave 60 percent of UMG shares to its shareholders after proposing that UMG go public as its own company, according to CNBC. Vivendi (VIV) has its stock publicly listed on the Euronext Paris stock exchange, while UMG’s stock is listed on the Euronext Amsterdam stock exchange.

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The IPO price for UMG was €18.5 ($21.69) per share. After UMG was listed on the market, it reached as high as nearly €25 ($29.32). According to Reuters, the market value for the music label jumped to €47 billion ($55 billion) after being publicly listed and became Europe’s largest listing of 2021. UMG chairman and CEO Lucian Grainge is estimated to have earned approximately $140 million off of the company’s public listing.

Vivendi fully or primarily owns global companies including Gameloft and Dailymotion. Gameloft is the world’s largest mobile gaming publisher, while Dailymotion is one of the biggest video-sharing platforms in the world. After UMG went public, Vivendi only has a 10 percent stake in the company. The music label accounted for three-quarters of Vivendi’s profits, according to CNBC.

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Warner Music Group share prices would hit an all-time high after UMG went public.

WMG share prices increased over 12 percent on Sept. 21—one of the largest single-day jumps it had this year. Currently, the stock has had its second-best month since going public in June 2020. It hit an all-time high of approximately $45.45 on Sept. 21.

UMG also owns over $1 billion worth of shares in Spotify.

All of the big three music labels were early investors in Spotify before it went public in 2018. However, Warner Music Group reportedly sold all of its stake for $504 million in 2018, while Sony Music Group sold half of their Spotify shares. With a 3.5 percent stake in Spotify, UMG is expected to have the biggest stake out of the three labels, worth approximately $1.6 billion.

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