NEW YORK — Warner Music Group late Tuesday priced its initial public offering at $17 per share — well below the $22-$24 it anticipated earlier this year, a range that Wall Street analysts had said was much too high.
The Gotham-based company, led by Edgar Bronfman Jr., sold 32.6 million shares, down slightly from the 33 million it said earlier it planned to sell.
The new price values the company at $2.4 billion, compared with the earlier price of as much as $3.4 billion. Bronfman and a consortium of financial investors bought Warner Music from Time Warner last year for $2.6 billion.
Warner Music is set to start trading todayon the New York Stock Exchange under the symbol WMG.
It will join EMI as the second major music group to trade as a standalone public company at a time when the industry is in a major state of flux, beset by slowing sales and fierce competition. Case in point: Yahoo! announced Tuesday plans to debut an online music service with prices dramatically lower than its rivals.
Overall, U.S. music sales are down almost 8% this year. (Warner’s are down less than the average thanks to a few top-selling albums.)
In a conference call with investors Friday, Sanford Bernstein analyst Michael Nathanson called the initial IPO valuation “utterly out of line with reality.”
Linkin Park, one of Warner’s biggest acts, has criticized the IPO for seeking to enrich WMG’s owners instead of funneling cash proceeds to the company or its artists.