Friday File: Music Royalties, Swedish Betting and Gold Speculation

Stock Gumshoe is closed today for the Independence Day holiday, but I did put together a few thoughts last night, and have a couple updates for you on the Real Money Portfolio, so we at least have an abbreviated Friday File for you…

Hipgnosis Songs Fund (SONG in London, HPGSF OTC in the US) has been getting some press over the last month, after reporting strong results for their first full fiscal year (ended March)…

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Hipgnosis Songs delivers a hit from lockdown easy listening (Investment Trust Insider)

Hot Pandemic Market: Music Royalties
Unable to tour, artists tap their catalogs for income as music rights increasingly are seen as ‘a sound alternative asset’ (Wall Street Journal)

Hipgnosis, With a Catalog Worth Nearly $1bn, is Becoming Less Reliant on Modern Pop Hits (Music Business Worldwide)

And that optimism led, as one might expect, to another announced equity offering, this time of GBP200 million to allow them to buy yet more song royalties.

That equity raise now planned will be at 100 pence, so that’s obviously a discount to the current share price of 116p, but that’s similar to how they’ve raised money in the recent past — they’re offering C shares, which will be tied directly to the value of the songs they acquire with this capital, and then those C shares will likely be merged into the fund at some ratio based on that net asset value, probably within six months but it could take as long as a year or so if they want to delay it. The company expects that money to be spent within three months. I invested in the C shares last time around, hoping to get into the fund at a small discount, but the way it worked out the discount was so tiny at maturity (when they converted into ordinary shares) that it wasn’t really worth the math and headaches — I would have done fine just buying the ordinary shares, and I’m guessing that will also be the case this time.

This is the quote from CEO Merck Mercuriadis about the offering:

“Having invested over USD1 billion dollars in some of the most extraordinarily successful songs of all time in the last 24 months, we are now a FTSE 250 company and the 58th biggest yielder on the index.

“This has firmly established songs as a new uncorrelated ...

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