Music interest

Morgan Stanley brings Tencent Music stake to nearly 100 million shares

Morgan Stanley increased its stake in Tencent Music (traded as TME on the NYSE) to nearly 100 million shares.

The Manhattan-headquartered investment bank and financial services company recently shed light on its large stakes in Tencent Music in a Schedule 13G filing, an alternative to Schedule 13D that must be submitted. to the Securities and Exchange Commission (SEC) after an entity purchases five percent. or several shares of a listed company.

According to this document, Morgan Stanley now holds a total of 96,229,448 TME shares, compared to 68.07 million shares as of September 30, 2020, by Fintel. These shares represent 7.2% of Tencent Music itself.

Calculated using Tencent Music’s per share price ($ 26.54) at the time of this article’s publication, Morgan Stanley’s massive investment is worth around $ 2.55 billion. In addition, the record also indicates that the central financial services held the shares as of December 31, while TME was worth around $ 19.24 per share.

Morgan Stanley’s multibillion dollar stake in Tencent Music – and the remarkable share price growth the company has enjoyed in the new year – seems to indicate the high hopes some finance professionals have for the industry. growing Chinese music. Certainly, the entity, which operates the streaming services QQ Music, Kugou Music and Kuwo Music, as well as the karaoke app WeSing, revealed record growth in the number of paying subscribers in the third quarter of 2020.

In addition, Tencent Music’s quarterly revenue jumped 16% year-on-year to $ 1.14 billion, according to the earnings release. And in addition to establishing a clear presence in the entertainment space in China – whose revenue potential has been the subject of much debate in the not-so-distant past – the streaming company has recently taken several steps to strengthen its platforms, secure more capital and, with the financial support of global conglomerate Tencent, buy stakes in leading companies in the sector.

Building on these points, Tencent Music announced last month that it would spend $ 415 million to acquire Lazy Audio, a Chinese podcast, radio and audiobook platform. News of the large purchase broke just after reports indicated that the Tencent subsidiary would conduct a multibillion-dollar IPO in Hong Kong.

While this second list is not yet set in stone, more recent updates suggest Tencent Music is laying the groundwork. for $ 5 billion Hong Kong IPO at some point this year; JPMorgan Chase and Morgan Stanley, for their part, would lead the offer.

Finally, Tencent (and a consortium of other investors, including Tencent Music itself) increased its stake in Universal Music Group to 20% before the Big Three record company debuted.