How You Could’ve Bought Universal Music Group’s Shares Before It Went Public
One of the most anticipated IPOs of 2021, Universal Music Group (Universal), finally debuted on Euronext and received a stupendous response from investors. The stock prices surged in their market debut, closing at €25, approximately 36% above the reference price of €18.5 per share.
Based in Santa Monica, California, Universal is one of the “Big Three” record labels alongside Warner Music Group and Sony Music, accounting for almost a third of all recorded music sales globally.
What’s the current valuation of Universal Music Group?
When Vivendi originally proposed an IPO for Universal in February 2021, its estimated value was $36.4 billion. However, just a few months later in June, Pershing Square Tontine Holdings — a Special Purpose Acquisition Company (SPAC) — acquired a 10 per cent stake in Universal for $4 billion, pushing the total valuation past $40 billion.
However, the IPO further pushed the music giant’s valuation to €46 billion, approximately $54 billion.
But there could’ve been another way
The applications for Universal’s IPO opened on 21/09/2021 at Euronext Amsterdam and, as expected, the retail quota was oversubscribed. Securing an allotment was be unlikely for most applicants given the hype around Universal and the highly competitive nature of IPO investing in general.
Furthermore, only European investors got the chance to apply for the IPO. Retail investors based in Australia, Korea, India or any other country were out of luck.
Alas, many retail investors missed out on the listing profits. Private investors like Chinese media and e-commerce giant Tencent, who increased their stake to 20% in the company before the IPO, made the most significant profits once the stock was publicly listed.
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