Please ensure Javascript is enabled for purposes of website accessibility

Why Live Nation Stock Popped Today

By Evan Niu, CFA – Apr 27, 2020 at 2:56PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Saudi Arabia's sovereign wealth fund bought a passive stake in the live entertainment company.

What happened

Shares of Live Nation (LYV -0.73%) have popped today, up by 10% as of 1:50 p.m. EDT, after Saudi Arabia's sovereign wealth fund disclosed that it had acquired a 5.7% stake in the live event specialist. The stake is valued at around $500 million.

So what

In an SEC filing, the oil-rich nation's Public Investment Fund (PIF) said it had scooped up over 12.3 million shares, representing roughly 5.7% of Live Nation's 215.2 million shares outstanding. That makes Saudi Arabia the company's third-largest shareholder. Liberty Media remains Live Nation's largest shareholder, with 69.6 million shares, or a 33% stake.

People at a music concert with bright lights emanating from the stage and obscuring the musical act

Image source: Getty Images.

The PIF bought the shares in the open market, so Live Nation did not receive any of the cash directly or raise any capital. Live Nation has taken steps to strengthen its financial position to weather the COVID-19 pandemic, which has shut down all manner of live events like music concerts. 

Now what

Live Nation has been hit hard by the novel coronavirus outbreak, with shares down over 40% year to date. Meanwhile, PIF has signaled that it is looking for opportunistic investments that may bounce back once the world beats COVID-19. PIF head Yassir al-Rumayyan said earlier this month that PIF was looking in various sectors, including entertainment. The fund recently took an 8.2% stake in cruise operator Carnival.

Live Nation said earlier this month that it had amended debt covenants while increasing its revolver by $120 million, bringing total available debt to $940 million. Including current cash, Live Nation now has $3.8 billion in total liquidity available.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Live Nation Entertainment. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Live Nation Entertainment Stock Quote
Live Nation Entertainment
$79.87 (-0.73%) $0.59

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.