Warner Music Faces Challenging Wall Street Week

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Wall Street may continue to punish Warner Music Group this week, now a battered stock.

Shares of WMG dipped as low as $6.21 last week before settling at $6.34 by the closing bell Friday.  The stock, now a sub-$5 threat, has been buffeted by both external market conditions and a disillusioned recording industry investor.  Instead of improved revenues and a successful digital transition, investors have mostly witnessed a downward sales spiral – as well as the departure of superstars like Madonna.

Now, onlookers are wondering exactly where the bottom is.  Clearly, Warner has assets on its balance sheet – both on the recording and publishing side.  But a punishing year is wreaking havoc on investor psychology, and the all-important fourth quarter is offering little relief.  Cumulative album sales recently edged towards 442.5 million units for the week ending December 9th, a 14.8 percent year-over-year decline according to Nielsen Soundscan.