Shares of Aspiro Group ($ASP.ST) on the Stockholm Exchange were halted during trading hours after the market got wind of the news that Jay Z and his entourage would be launching a streaming partnership, and the knee jerk results of speculators buying large stakes in the publicly traded Aspriro.
Aspiro, which owns Tidal High Fidelity Music Streaming and advertises itself as “offering high fidelity lossless sound quality, a prerequisite to enjoying music the way it was intended by the artists,” is now held by the likes of world-renowned artists like Jay Z, Beyonce, Kanye West, Nicki Manaj and others. The Jay Z and Beyonce Empire is flanked by many industry big hitters – this is certainly not the first big deal this conglomerate has made. However, halting shares on the Stockholm Exchange shows the power of the group, and the power of social media – even across continents.
It's a Hard Stock Life
Reviewing shares that traded yesterday reveals an overwhelmed and eventually halted stock that was overcome by speculators and normal broker execution gone amok. Based on the prints released by the Stockholm Exchange, you see prints that range from $1 to $11 during the session. To my eye, these prints were the reflection of an overwhelmed exchange and its electronic trading system. There is essentially zero chance a trade could happen at $2, then $11, then another at $2. This was some sort of internal routing error during a system failure – which is why it was halted. This is something Jay Z now has in common with 50 Cent – the ability to create a frenzy of buying with his following.
Aspiro Stock: 5-Day Listing:
It’s important to note that wealth is being created in giant steps by the new age entrepreneur. When you look at the Fortune 500 Billionaire List, it is filled with popular tech moguls, sports and rap stars like Michael Jordan, Mark Zuckerberg , 50 Cent, Dr Dre and of course the Jay Z - Beyonce Empire. It also illustrates the robust ability of social media to move a stock on a sleepy exchange.
Stocks Move to a Different Beat
When Apple, Inc. (AAPL) bought all outstanding private shares of Beats from Dr. Dre, they paid $3 billion dollars in cash – Apple’s single largest purchase in the company’s history. Dre sold shares to his buddies and curried favor like a hedge fund mogul - and made everyone rich. LeBron, Diddy and friends of Dre all made more money in a single transaction then they had selling music- and got a taste of equity trading.
Jay Z is not the first rap artist to go the mogul route, as 50 Cent monetized Vitamin Water and made an unconfirmed $30 million. It has been reported that Dre banked $175 million, and everyone got healthy returns on all monies invested. It’s looking like an investment in Aspiro is the same story. We will see how this shakes out in future trading, which will be based on the revenue Tidal brings in, and the enterprise value it creates.
One note of caution when it comes to cornering equity markets – which is different than selling CD’s out of the trunk, is that there is a regulating body called the SEC lumbering over regulation in equities. These folks are not as friendly as the street corner cops outside of Brooklyn…so watch yourself.
I would go read the story about Nelson Bunker Hunt, and his descent into cornering the metals in the 1980’s. The lesson to take away is that it never works the way you expect it to work. But for now, I plan to simply sit back, watch the action unfold, and perhaps listen to the story through my state-of-the-art noise-cancelling headphones.