Boston, MA, 10/15/2013 – The debut of SFX Entertainment Inc. (NASDAQ:SFXE) on the stock exchange market after the IPO was without much rave as one would have expected, it so appeared the electronic dance music (EDM)promoter had lost the beat.
After selling 20 million shares at $13 a share in the IPO, the entertainment company managed to raise $260 million, but hours later, it took a plunge, shedding 8.5% of its share value to trade at $11.89. But should investors be scared away that SFX fell by significant margin just a day after debut in the stock market? Not really.
Considering what the festivals and events company is plotting, the $260 million raised through IPO brings the much needed financial strength for the company to meet its dream acquisitions. SFX will use proceeds from the IPO to complete its purchases of ID&T Business; I-Motion GmbH Events & Communication, a German electronic-music event producer; Totem Onelove Group, an Australian festival producer; and a 70 percent stake in Made Event LLC, which produces Electronic Zoo in New York.
This is why insiders say that for SFX, the IPO was designed to boost the financial muscle so that it can effectively take on its rival Live Nation on bids. The Electronic Dance Music sector, while still in its early stages, is one that is glowing red hot. Recent articles in Forbes, New York Times, and USA Today highlight interest in this growing sector. In fact, the sector is projected to grow to $4.5 billion this year alone with more positive forecast in the coming years.
With just a handful of companies publicly trading in this sector, we have quickly noticed one that appears to be in the infancy stages compared to SFX, yet is getting a lot of attention today.
NightCulture Inc (OTCMKTS:NGHT) is seeing a drastic increase in volume today which has helped drive its share price up nearly 100% in early trading today. With a mere $4 million Market Cap and closing in on $5 million in revenues this year alone, NighCulture is operating lean and mean making them a prime acquisition target. NightCulture is already partnered in all of its markets with Disco Productions, who was recently acquired by SFX for $4 million in cash and $5 million in stock. The filing shows that Disco was doing around $20 million in revenues at the time of the acquisition, with a Net Loss of around $500k.
