Vanguard Ups Warner Music Stake to 10.4 Million Shares As Robert Kyncl Takes Over — 7.6% of the Company

Robert Kyncl Warner Music Group
  • Save

Robert Kyncl Warner Music Group
  • Save
Photo Credit: BazzaJ / CC by 4.0

Vanguard Group now owns more than 10.42 million shares in Warner Music Group (NASDAQ: WMG), or 7.6 percent of the company, according to a newly submitted Securities and Exchange Commission (SEC) disclosure.

Valley Forge-headquartered Vanguard just recently identified its increased Warner Music Group stake in a 13G/A form. The 48-year-old firm previously owned about 8.54 million WMG shares (or around seven percent of the company), per Fintel, and the SEC filing shows that the holding has grown to 10,421,289 shares.

When the market closed today, Warner Music stock was worth $34.33 per share – meaning that the value of Vanguard’s interest in the business has cracked $357.76 million. And while time will reveal the precise objectives behind the sizable (and growing) WMG holding, it bears mentioning that Vanguard upped its stake just days after former YouTube exec Robert Kyncl started as the Big Three label’s sole CEO.

While unveiling Warner Music’s Q4 2022 showing earlier this week, Kyncl acknowledged that last year’s final three months had been “tough” for his company. During the stretch, WMG suffered an almost eight percent revenue decline, fueled by a double-digit falloff on the recorded side, and net income decreased by approximately 34 percent.

But without delving into specifics, Kyncl during the corresponding earnings call touched upon plans to make potentially far-reaching changes at Warner Music in an effort to improve both revenue and efficiency.

“I also hired Ariel Bardin as our president of technology,” Kyncl spelled out. “Ariel’s career includes 16 years at Google, where he built, launched, and led some of the company’s most successful products, including YouTube’s creator tools, memberships, and Content ID. He will drive the development of the systems, infrastructure, and products needed to support our growth.”

Furthermore, Kyncl emphasized that the cost increases associated with non-music streaming platforms like Netflix have been “much more significant than” those associated with services such as Apple Music and Spotify (the latter of which continues to resist raising the price of its individual plan in the U.S.).

Finally, 53-year-old Kyncl, who’s roughly a decade younger than Universal Music Group head Lucian Grainge and about seven years younger than Sony Music Entertainment CEO Rob Stringer, relayed that he would “continue to share more and more information in a very straightforward and transparent manner” moving forward.

Consequently, it’ll be interesting to see precisely how Warner Music – which announced a $0.16-per-share dividend today – works to expand in the approaching months and years, after investing in and/or partnering with all manner of emerging digital players under now-former CEO Stephen Cooper.