The Music Business: Yep, It’s Still In Trouble
Last month, stock analyst Rich Greenfield said that shares in Warner Music Group were worth a mere $7.50, thanks to consumers viewing music as “just above dust bunnies” in the “worth” department. The stock plummeted, and yesterday Greenfield downgraded the stock’s price again, saying specifically that reduced floorspace in big-box stores will hurt the recorded-music business even more.
Greenfield put the stock’s target price at $5 in his latest missive, and so far today, shares have gone down accordingly, complete with dead-cat bounce; the graph above was just snatched from Yahoo! Finance. Silicon Alley Reporter is hearing that once the stock gets low enough, EMI owners Terra Firma may try and snatch up the company; it seems unlikely at this point given Terra Firma’s desire to cut costs at all costs, but if a combined EMI-WMG does finally come to fruition, it’ll surely buoy the fortunes of anyone who directly makes money off of copying documents that are handed out during mass layoffs.
WMG: How Low Can It Go? Will EMI Buy? [Silicon Alley Insider]