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Universal Music Shares Rise 38% On Euronext Debut

The shares of Universal Music Group NV rallied after they made their debut in Amsterdam's Euronext stock exchange on Tuesday, with shares being distributed among French media giant Vivendi's investors.

Universal Music Group's shares were up 38 percent above a reference price set on Monday evening by the Euronext exchange. The surge in stock is interesting as it comes at a time when there is a renewed interest in the music industry as an investment. This fresh interest can be attributed to the good performance by music catalogs, music-streaming companies and music technology.

On Tuesday, the music label's market value touched 45 billion euros or $52.8 billion. This is higher than the 33 billion pounds valuation after billionaire William Ackman bought a 10 percent stake in the company through his Pershing Square Holdings Ltd. hedge fund in August.

Another important investor in Universal Music is a consortium led by Chinese tech giant Tencent Holdings Ltd. (TCEHY). Over two transactions conducted in 2019 and 2020, the group has bought a 20 percent stake.

The owner of Vivendi, Vincent Bolloré, holds a separate 18 percent stake in the music company, after the listing. Shares of Bollore's holding company were up 4 percent in Paris trading on Tuesday.

The renewed interest in the music industry can be attributed to the increase of streaming on services such as Spotify Technology SA and Apple Inc.'s Apple Music. The music industry, which was battling online piracy saw its fortunes turn in 2016 with the streaming services business outperforming CD and digital download sales. Streaming music now attributes to 80 percent of the revenue of music labels in the U.S. On a global basis, it accounts for around 60 percent.

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