Spotify leads music stocks, SM Entertainment shares fall after sex scandal

Spotify's share price rose 3.9% this week after the company's announcement of a price increase in the U.S. on Monday (June 3) sent the stock on a rollercoaster ride. Shares rose to a new 52-week high of $331.08 on Wednesday – the highest since February 25, 2021 – before closing at $308.11 on Friday (June 7).

After Spotify raised subscription prices in the United States and many other major markets in July 2023, the company further increased prices in the United Kingdom and Australia in May. The additional price increase in the U.S., which takes effect in July, raises individual plans to $11.99 per month and family plans to $19.99 per month. The higher prices help Spotify cover the cost of bundling music with limited free streaming of audiobooks. However, the streamer offers its customers plenty of options. A music-only plan was introduced in the United Kingdom that costs £10.99 ($13.99) per month, compared to £11.99 ($15.26) per month for the music-and-audiobook option. Duo plans for two people and student plans also offer discounts on the standard individual plan.

The Billboard Global Music Index rose 0.1% to 1,801.44 as Spotify's gain helped overshadow losses for 13 of the index's 20 companies. Other of the index's largest companies posted slight declines this week: Warner Music Group fell 0.9% to $29.51, Universal Music Group fell 1.2% to 28.23 euros ($30.53) and Live Nation fell 3.4% to $90.56. The index is 2.5% below its high of 1,847.64 reached in the week ending May 3, 2024.

iHeartMedia, the index's biggest gainer for the second week in a row, rose 35% to $1.25 for the week after gaining 6.4% earlier. In just two weeks, iHeartMedia's year-to-date loss has improved from 67.4% to 53.2%, without any major news releases or regulatory filings. At the company's annual meeting on Wednesday (June 5), shareholders re-elected the CEO. Robert Pittman and CFO/COO Rich Bressler to the Board of Directors and approved an advisory vote on the compensation of the Company's executive officers in 2023.

SM Entertainment fell 8.5% to 83,500 won ($60.51) amid controversy surrounding an alleged sex scandal involving Johnny and Haechan of the group NCT, which SM Entertainment denies. Such a big drop is not unusual when a K-pop company's artists feature big in South Korean news. In October, K-pop stocks fell when it was announced that SM Entertainment artist Exo was moving to another agency. In April, HYBE's shares fell sharply after it was announced that Min Hee-jinCEO of the HYBE imprint ADOR, had tried to take over the management of the subsidiary label.

CTS Eventim rose 4.3 percent to 82.80 euros (89.56 dollars). On Thursday (6 June), the German concert promoter and ticket sales group completed the acquisition of Vivendi's festival and ticketing business for 327 million dollars. Last year, See Tickets sold 44 million tickets and generated revenue of 105 million euros (114 million dollars). The deal does not include See Tickets France.

SiriusXM shares fell 9.5% to $2.56 this week, for a year-to-date loss of 53.2%. The satellite radio company, which also owns streaming platform Pandora, is betting on the success of the new streaming app it launched in December and its $9.99-per-month price tag. The in-car satellite product, which includes streaming access, costs “about $19” per month, the CEO said. Jennifer Joke he said at the JP Morgan Global Technology, Media and Communications Conference on May 21. The company is trying to retain those satellite customers while attracting new streaming customers and reducing its reliance on promotional discounts. “I think we'll have opportunities to both meet more demand and maintain that full price base at those higher prices and implement price increases over time,” Witz said.

Some U.S. stock indexes hit all-time highs this week. The S&P 500 hit a record 5,375.08 on Friday but closed at 5,346.99, down 0.1 percent. The tech-heavy Nasdaq Composite hit a new high of 17,235.73 on Thursday and closed at 17,133.12 on Friday, up 2.4 percent from the previous week. In the U.K., the FTSE 100 fell 0.4 percent to 8,245.37. South Korea's KOSPI Composite Index rose 3.3 percent to 2,722.67. China's Shanghai Composite Index lost 1.2 percent to 3,051.28.