Live Nation stock keeps tumbling
The share price dropped as much as 33% Wednesday before rebounding slightly to end the day down 13%.
The stock market doesn’t necessarily reflect a company’s value and potential, but the live music business’ outlook is clearly bleak and the concert business is now in uncharted waters with the possibility of a protracted fight against the virus throughout North America and Europe. Cities throughout the U.S. have banned large gatherings, some to as few as 10 people, and required people stay at home with shelter in place orders in San Francisco and likely more coming.
Deep declines in stock prices affect a company’s ability to raise capital or make stock-based acquisitions and take years to return to previous highs. The Dow needed about four years to claw back a 57% decline during the Great Recession crash of 2008, according toby CNBC and Goldman Sachs. A typical bear market -- a 20% decline from the previous all-time high -- has lasted 14.5 months and needed two years to recover. On Wednesday, the Dow closed 48.6% off its 52-week high.
The stock market was down across the board on Wednesday, with the Dow 30 index closing down 6.3% after falling as much as 8.8% earlier. The S&P 500 and Nasdaq ended the day down 5.2% and 4.7% respectively. The Russell 2000, an index of small-cap stocks, fared even worse by sinking 10.4%.
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