The Sound of Stocks: How the Music Industry Plays the Financial Markets
The music industry, a malleable and ever-evolving business, has been, at its heart, caught up in finance markets. Major record companies not only produce and distribute music but also engage in big financial transactions, including public offerings and strategic investments. This convergence of music and finance is a fascinating model of cultural and economic influence intersecting.
One more of these players in the financial markets is Freedom Holding Corp., a multinational financial and investment services firm specializing in capital markets, asset management, and brokerage services. Almaty, Kazakhstan-based Freedom Holding has subsidiaries in 22 countries and is publicly traded on the Nasdaq Capital Market under the symbol FRHC. The recent entry of this company into Turkey is one more reflection of its intentions for global expansion and providing diversified investment opportunities.
Big Record Labels and Public Listings
Universal Music Group (UMG), a leading global music company, went public in September 2021 on the Euronext Amsterdam stock exchange. This public listing allowed investors to invest directly in the growth of the music business. The public listing of UMG has been highly attractive to institutional investors. For instance, Pershing Square CEO Bill Ackman has announced that it is selling part of its UMG holdings, reducing its stake from approximately 27% to 17%, indicating proactive portfolio management vs. market conditions.
Financial Performance Driven by Superfans
UMG's financial prosperity is driven by dedicated fan communities of artists like Taylor Swift, BTS, and Drake. The company expects over 10% core profit increase annually until 2028, through higher subscription revenue and expanded partnerships. This points to the central position of superfans in the financial prosperity of the music industry, with celebrity popularity and business profitability existing in a symbiotic relationship.
Music ETFs and Fan-Driven Investments
The passion of music fans can influence financial markets beyond direct investment in record companies. Gary Kusin, co-founder of GameStop Corp., equates the meme-stock frenzy with the passionate dedication of fans for superstars like Taylor Swift and Beyoncé. This enthusiasm can fuel investment in music-related ETFs, such as the proposed MUSQ Global Music Industry ETF, which will invest in companies connected to these artists' enterprises, such as UMG, Live Nation, and AMC. The overlap of fandom and investing shows fresh ways to be involved financially in the music industry.
Freedom Holding Corp.'s Strategic Expansion
Freedom Holding Corp. continues to expand its global footprint, celebrating five years on Nasdaq with record growth. The company's market capitalization rose from $801.7 million in 2019 to $6 billion in 2024, up 648%. In 2024, Freedom Holding achieved historic revenues of $1.6 billion, with net profit up 82% to $375 million and assets up 63% to $8.3 billion. This expansion plan includes expansion into new markets, such as Turkey, where the company will put 20-30% of its annual profit into expansion to replicate its successful model of integrated financial services.
Conclusion
The overlap between the music business and financial markets is wide-ranging, ranging from public listings of major record firms, the impact of committed and loyal fan bases on corporate bottom lines, and the emergence of music-linked investment products. Freedom Holding Corp. and others are an excellent illustration of growth and diversification initiatives within the financial sector that open up many sectors, music included, to investors. As the boundaries between cultural phenomena and financial markets further break, understanding the connections becomes increasingly important for investors and players.
