Who's Buying WMG Shares?
Shares of Warner Music Group (WMG) closed at $7.06 today. That's a 53% jump from WMG's historic low of $4.57, which it hit... just over two weeks ago, on Jan. 9.
So what's happened in the last two weeks? Have Warner's prospects, or those of the music industry, improved? We can't see how. And the market itself is in the dumps. What gives?
One kind-of plausible argument: Jessica Reif Cohen's January 11 call, when the Merrill analyst upgraded WMG to a "buy", arguing that the company was screwed long-term, but that for the time being the shares were underpriced. But Jessica made that call when WMG was about $5, and it stayed that way for another week or so: Shares didn't really start climbing until last week.
A much more exotic theory, whispered in our ear today: Len Blavatnik, whose Access Industries holding group owns 2% of WMG, has been buying up more shares after stepping down from the WMG board January 16th. Len is doing this, the argument goes, as a some sort of favor to WMG boss Edgar Bronfman. Nice favor!
PR reps for both Warner and Access gave us the pro forma "we don't comment on market rumor and speculation" line. But someone who ought to know says that even if Len wanted to buy WMG shares, he'd still be a considered an insider by SEC standards, and would be prevented from trading until after WMG's next earnings release at the end of February.
So. Any other bright ideas? WMG has already dropped 5% since we began writing this post: Yahoo says it's trading at $6.73 in the aftermarket.
So what's happened in the last two weeks? Have Warner's prospects, or those of the music industry, improved? We can't see how. And the market itself is in the dumps. What gives?
One kind-of plausible argument: Jessica Reif Cohen's January 11 call, when the Merrill analyst upgraded WMG to a "buy", arguing that the company was screwed long-term, but that for the time being the shares were underpriced. But Jessica made that call when WMG was about $5, and it stayed that way for another week or so: Shares didn't really start climbing until last week.
A much more exotic theory, whispered in our ear today: Len Blavatnik, whose Access Industries holding group owns 2% of WMG, has been buying up more shares after stepping down from the WMG board January 16th. Len is doing this, the argument goes, as a some sort of favor to WMG boss Edgar Bronfman. Nice favor!
PR reps for both Warner and Access gave us the pro forma "we don't comment on market rumor and speculation" line. But someone who ought to know says that even if Len wanted to buy WMG shares, he'd still be a considered an insider by SEC standards, and would be prevented from trading until after WMG's next earnings release at the end of February.
So. Any other bright ideas? WMG has already dropped 5% since we began writing this post: Yahoo says it's trading at $6.73 in the aftermarket.
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