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Posted by Dave
Rap News Network
5/12/2005 9:09:00 AM

Tags and topics realted to this article include P. Diddy.

Only a few days after New York's IPO road show, Warner Music Group cut down its offering price to $17 per share late last night.
 Warner, trading under the WMG symbol on the New York Stock Exchange, got off to a sluggish start after falling 85 cents to $16.15 in early trading. Sources say the company, which listed the initial price at $22 to $24 per share, reduced the shares to $17 once word spread that the high price was unjustified. Prior to the IPO, a report by Fulcrum Group analyst Richard Greenfield revealed that the $22 to $24 pricing of the Warner Music IPO was too high.
 "We do not suggest participating in the IPO at that level," Greenfield wrote. "We believe an IPO price of $20 or less is needed to achieve a minimum 12-month return of 15%."
 Thus far, the company has sold 32.6 million shares to the public, generating $554.2 million. The company is seeking to raise $750 million. However, it only plans on using $7 million for general corporate purposes. The rest of the revenues will serve to reimburse debts and current investors selling their shares.
 Led by Edgar Bronfman Jr., private investors bought Warner Music Group for $2.6 billion last year. Warner's artists include Madonna, Missy, Fabolous, Fat Joe, Lil' Kim and Sean "P. Diddy" Combs, who recently sold half of his Bad Boy Entertainment to the company for a reported $30 million.
 Diddy was on hand to represent Warner at the recent IPO road show. Diddy mingled with Wall Street executives and signed autographs in hope to convince potential investors into purchasing Warner shares.

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