Record company bloodletting: Warner Music stock collapse

By Karyn Chenoweth Nov 10, 2007, 19:50 GMT

Edgar Bronfman Jr., president and CEO of Warner Music Group, EPA/MATTHEW CAVANAUGH

Roger Friedman of FOX News reported that as of 10:30 Friday morning, Edgar Bronfman Jr's. Warner Music Group stock has collapsed.

The once great record label that wielded much influence in the US and worldwide music scene is now selling at around $7.50.

The stock reached its 52 week low earlier Friday morning at $7.26.

Contrast this to the fact that a year ago, WMG was at $27 a share.

Friedman writes that "WMG manages to finish a little higher by the end of Friday, the fact remains that nearly every day of this bear market notches them a little lower. If and when the stock price drops below $7, one wonders how much more primary financiers Thomas Lee and company can take it."

The woes of Warner Music Group is cited by Friedman as a "lack of music, no artists, no signings, no development of new artists, as well as wildly overpaid executives and bad business deals."

He cites the dismal investment of $30 million in Sean "Diddy" Combs' Bad Boy Entertainment, which Friedman claims "has turned up nothing of value."

WMG has seen its earning superstars like Madonna leave for Live Nation after 25 years with WMG.

The company could no longer afford her, writes Friedman.

The Eagles ditched their longtime recording home of Warners, and now have their own label with Wal-Mart. They sold 711,000 copies of their new album this year.

Friedman notes other embarrassments for Warners who passed on the "Hairspray" soundtrack, a hit for New Line Cinema.