Warner Music Executive Sells 23% of Stake
August 14, 2008 at 7:21 AM (PT)
WARNER MUSIC’s top U.S. executive for recorded music, LYOR COHEN, sold 23% of his shares in the company earlier this week, reports THE NEW YORK TIMES. News of the sell-off pushed WARNER’s shares down more than 10% on WEDNESDAY in mid-day trading, to $7.27. COHEN’s stock sale comes after WARNER’s shares had climbed nearly 80% from all-time lows in JANUARY, as long-held concern about the company’s prospects in the beleaguered music industry appeared to be abating.
He sold 800,000 shares on MONDAY at $8.45 each for around $6.8 million, according to a filing with the U.S. Securities and Exchange Commission on TUESDAY. He retains ownership of another 2.6 million shares.
One WALL STREET analyst said the sale by COHEN, Chairman/CEO of WARNER RECORDED MUSIC NORTH AMERICA, contradicted management’s contention that the company’s shares were undervalued. "While WARNER MUSIC GROUP’s (organic) revenues continue to decline, we are quite surprised to see Mr COHEN selling such a large block of stock at these levels," said PALI RESEARCH analyst RICHARD GREENFIELD, a long-time critic of the company’s management.
COHEN said his confidence in WARNER’s future prospects remained as strong as ever.
"This sale reflects nothing more than a normal need for liquid assets for personal expenses, as well as my financial adviser’s recommendation that I diversify my portfolio for tax and estate planning," he said in a statement.