Streets Is Watching: Suspicious Selling Emerges at Warner Music

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Shares of Warner Music Group (WMG) have boomed from a sub-$2 basement, thanks to a sudden shift by analysts and a revived market.

But a revitalized stock price could be prompting some suspicious selloffs – potentially the start of a deflating balloon.

On Monday, Barron’s pointed to an early June dump by Vice Chairman of Strategy and Operations Michael Fleischer, who sold 400,000 shares for $3 million.  That was closely followed by chairman and CEO of Warner Chappell Music David Johnson, who shed 4,000 shares for $35,000.

That puts Pali Research analyst Richard Greenfield in a tough spot, especially following a shift to a ‘Buy’ rating.  In previous periods, Greenfield railed against Warner executives for enriching themselves at the expense of shareholders.  That included Lyor Cohen, who was accused by Greenfield of dumping stock to finance a Hamptons refurbishing.  “The reported price paid for the teardown is $6.8 mm, spot on with the dollar value of Lyor’s August 11th sale,” Greenfield noted last year.  Greenfield recently lifted his price target to $7.50.

Report by analyst Alexandra Osorio.