The coronavirus (COVID-19) pandemic has impacted an array of music industry companies and organizations, including Live Nation. To help the prominent concert organizer effectively address the challenges, mass media company Liberty Media has repaid a $130 million margin loan in full.
Liberty Media owns one-third of Live Nation’s common stock — nearly 70 million shares — and the corresponding margin loan was used to create liquid capital long before the recent stock market downturn. In short, Liberty Media took out a loan against its Live Nation shares, and by repaying the loan, the company has prevented “a sale of the underlying stock.”
Undoubtedly, the move served to benefit both Liberty’s investment and Live Nation’s financial situation. During the last month, as the coronavirus pandemic has become increasingly urgent, Live Nation’s per-share price has fallen from over $75 to as low as $21.70. Today, however, amidst a small market upturn, Live Nation stock recorded an 11.6 percent gain.
Liberty Media owns the Atlanta Braves (which is one of two MLB teams operated by a corporation), 71 percent of Sirius XM, and five percent of Indian music-streaming service JioSaavn, to name just a few portfolio holdings. Founded in 1991 by billionaire John C. Malone, Liberty Media is currently led by Greg Maffei, who was formerly Microsoft’s CEO.
Earlier this month, Maffei struck an optimistic tone with regard to the impact of the coronavirus on Live Nation operations. Moreover, the 59-year-old isn’t the only one who’s signaled long-term support for Live Nation, which reported 2019 earnings in excess of $11 billion. Live Nation CEO Michael Rapino, in addition to several Live Nation board members and executives, invested heavily in his company’s down-and-out stock last Friday.
The COVID-19 coronavirus is continuing to spread, though countries around the globe have dramatically ramped up their prevention measures and treatment options. The infection originated from Wuhan, China, and was first diagnosed last year.