Universal Music Group (UMG), the world’s largest music company, has filed to sell its shares on the US stock market. This powerful step speaks volumes about the company’s desire to plant deeper roots. They are looking to win the next big ticket investors on a market that is shifting towards favoring entertainment stocks.
UMG is presently riding high on a valuation of close to €50 billion ($43.3 billion, $58.5 billion) on the Netherlands stock exchange. That astounding number further cements its status as a powerful force in today’s music industry. That’s because the company is the proud parent of some major record labels. These same major labels count Taylor Swift, Drake, Lady Gaga, Billie Eilish, Ariana Grande, and Harry Styles as part of their international rosters.
Billionaire investor Bill Ackman, whose hedge fund Pershing Square is one of UMG’s largest shareholders, has been a vocal advocate for the company’s US listing. Given his prior comments, one can infer a deep conviction that this decision will add significant market value and liquidity to the company.
In January, Ackman tweeted on social media platform X about the US listing proposal boosting UMG’s value by “tens of billions.” He reiterated the likely economic impact of a US listing by saying,
“We also believe the US listing will greatly improve trading liquidity for the shares.” – Bill Ackman
Now UMG is instead filing to go public on the US stock market. This decision follows on their triumphant initial launch in the Netherlands, where they’ve recently established themselves as a burgeoning powerhouse of music rights management and artist development. Fueled by the company’s deep and talented roster of artists, their revenue successes continue to prove dominating to their competitors in the global market.
UMG seems to be preparing for this shift. According to industry analysts, a US listing would bring a wave of new investors to the table while providing existing shareholders with greater liquidity. UMG’s plans seem aimed at reaching the larger and more vibrant US market. This strategy will increase its financial flexibility and help fund additional growth initiatives.