Live Nation-al Debt

When Live Nation signed multi-million dollar deals with U2 & Madonna, they also included equity shares of the company into the deal. The idea being that U2 & Madonna would help build the company and should be able to receive some of the monetary compensation of Live Nation’s growth. Well, the economy didn’t really turn out as planned, and now, U2 is kindly requesting payment for their 1.56 million shares. Reports are that Madonna may be doing the same.

But now is not a great time to sell. The share price is a whopping $3.90, down from a year high of $18.75 per share. So what does this say about U2 and about Live Nation? I really doubt that U2 all of a sudden needs the money that this sale will generate. If they don’t need the money, then why would they sell when the share price is so low. One reason that would make sense would be because they don’t think the share price will go back up.

Apparently, U2 was told their shares would be worth $25 million. Right now, they are only worth around $6 million, so they are actually still seeking the $25 million. Still, the timing of this sale is odd. I will continue to keep an eye on Live Nation.

Stay tuned,
Erik
erikrostad.com