Investing In Musical Instrument Stocks

Michael Teague  |

In June, the piano-maker Steinway Musical Instruments ($LVB) announced that it would be acquired by the private equity firm Kohlberg & Company for some $438 million.

At the time, the offer amounted to $35 per share, a premium of one-third of the stock’s average price over the preceding 90 days, and came just months after the company sold its legendary Steinway Hall, located in New York City, right across the street from Carnegie Hall. Steinway had 45 days to explore rival bids, but that period is now over and the sale is well on its way to being consummated.

The piano maker is 160 years old and its products can be found throughout the world in homes and concert halls alike. But investors who are curious about where to go if they would like to invest in other companies that manufacture musical instruments will be sad to learn that there are not too many options. Makers of popular, iconic instruments such as Gibson’s and Fender’s guitars and basses, or Zildjan’s and Ludwig’s drums, are all privately-owned firms.

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Perhaps some of these companies learned from Fender’s brief ownership by CBS ($CBS) in the 1980’s, a period during which the large parent company produced inferior models of the classic rock ‘n roll guitars in order to save money. In any event, here are the few publicly-traded companies who deal in musical instruments.

Steinway Musical Instruments ($LVB) – the $500 million market-cap specialty piano-maker was watching its stock do nothing until late June’s buyout announcement. Since then, shares have jumped from around $25 per share, to just over $40 each, now up 90 percent year-to-date.

Yamaha Corporation ($YAMCY) – Yamaha Corporation trades on the pink sheets for $13.11 per share. The $2.54 billion company has been manufacturing a complete line of musical instruments that includes ranges from pianos and keyboards to guitars, basses, drums, and a whole variety of percussion instruments such as the xylophone, the timpani, and the vibraphone.

Sony Corporation ($SNE) – The $21.46 billion company no longer makes any actual instruments to speak of, but it still a leader in manufacturing equipment for the live performance and recording of music. Sony makes headphones, microphones, audio software, tuners, cables, and digital recording equipment. Shares are currently trading for $21, up 87 percent on the year.

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