The Live Nation Entertainment Inc [LYV] share price has dropped following the deaths of eight people at a music concert on 5 November. The crush at the Travis Scott’s Astroworld music festival in Houston, Texas also left hundreds of people injured.
Live Nation — the largest live booking company in the world — was the promoter of the event and is now facing as many as 14 lawsuits in connection with the incident. A criminal investigation is also being held.
The Associated Press reported that "some audience members said barricades erected near the stage and to separate different sections of ticket holders prevented fans from escaping”.
One lawsuit filed on behalf of one injured person states: "Conditions were created and consented to by the festival organisers that caused several stampedes and a crowd compression that resulted in the tragic deaths,” as reported by Yahoo Finance.
The company tried to repair some damage by issuing a statement declaring that it was "heartbroken" and would provide information and assistance to local authorities.
The Live Nation share price has fallen 6% to date from an all-time high close of $123.80 on 5 November, and the fear is that a hit to its brand reputation and nervousness around future events could see it fall much lower. Its record share price level came after the group reported on 4 November a stellar third-quarter performance as concerts and live events re-opened following pandemic lockdowns.
“Conditions were created and consented to by the festival organisers that caused several stampedes and a crowd compression that resulted in the tragic deaths” - from one lawsuit filed after events at Astroworld, per Yahoo Finance
Stellar Results
The Live Nation share price had taken a battering by COVID-19 as people were forced to stay at home to fight the virus, hitting a low of just $33 in March 2020.
However, it said that overall ticket sales at its major summer festivals in the third quarter of 2021 were up 10% on the same period in pre-pandemic 2019. During the quarter, 17 million fans attended Live Nation shows, with 90% of those coming in August and September, when concerts began to get into full swing.
Fan demand also led to double-digit increases in prices and on-site spending. Ticket-sales division Ticketmaster delivered its highest operating income ever at $114m, and Live Nation earnings per share came in at $0.19, beating forecasts of a loss of $0.06.
It added that it was encouraged by its leading indicators to anticipate record growth in 2022, with 22 million tickets already sold for shows.
“I remain more convinced than ever on the power and potential of live entertainment and the strength of our position,” said chief executive Michael Rapino. “No industry was more impacted by the pandemic over the last two years, and no industry has so proven its durability of demand in the face of such disruption.”
“I remain more convinced than ever on the power and potential of live entertainment and the strength of our position” - Live Nation CEO Michael Rapino
Bullish analyst views
After the results, Jefferies analyst David Katz upped the price target on the group to $125 from $103 and reiterated a ‘buy’ rating. Live Nation performance reflected “robust growth in concert activity backed by outsized fan growth,” Katz said as reported by Benzinga. Live Nation "defines the consumer recovery as well as any names in our coverage," and that it was "growing leadership in live entertainment globally," Katz added. Several others agreed with Jefferies.
Whether that and the share price predictions change after the events of the weekend we will have to wait and see.
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