The country led by the man who ordered Washington Post columnist Jamal Khashoggi’s assassination… the country led by the man who exterminates dissidents, or imprisons them for years… the country so repressive that it wasn’t until 2017 that women we given the right to drive…
The country, Saudi Arabia, is also giving individual investors clear directions where to put some money.
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), just took a huge stake in Live Nation (LYV), the live events and concert specialists.
The reason to be interested in the move is because the Saudi’s big buy is a passive investment. They bought their LVY shares on the open market and not as part of capital raised on behalf of the company.
As you can imagine, COVID-19 has hit Live Nation particularly hard as concerts and sporting events were bought to a standstill across the globe. Its shares were down more than 40%.
But, that was a buy signal for the Saudis, who purchased a 5.7% stake in the company, by acquiring 12.3 million LYV shares, which are currently valued at about $500 million.
That news drove LVY shares about 10% higher on April 27.
Despite the overall uncertainty hovering over the live entertainment industry, JP Morgan analyst David Karnovsky suggested the Saudis made a shrewd move.
Karnovsky argued that investors should take the long term view when considering Live Nation’s prospects.
He told Yahoo Finance, “For a stock where the most common pushback used to be valuation, this sets up fairly well for a patient investor, and this along with our long-term confidence in the live events business informs our Overweight rating. We recognize though with a lack of visibility into a touring schedule, the stock is likely to remain rangebound and potentially volatile near-term.”
Hopefully less volatile than Saudi Arabia’s brutal rulers.