by Alyssa Oursler | August 14, 2013 1:03 pm
Bands across the musical spectrum are often accused of “selling out,” but today those ranks were joined by an old-school piano-maker.
Steinway (LVB) — which was founded in 1853 and sells artisan-crafted pianos around the world — was sold to hedge fund manager John Paulson for $512 million.
Steinway has been on the brink of a deal for some time — as seen in the 94% run-up in share so far this year. In fact, it originally planned to stay within the music space, and sell itself to Kohlberg & Co. for $35 per share.
Paulson beat that — and a more recent bid from South Korea’s Samick Musical Instruments Co. — with $40-per-share offer.
But while Steinway was, in hindsight, a great investment year-to-date, don’t look to the rest of the music space for an encore. The only real options remaining are thinly traded ADRs like the $13 million Singing Machine Company (SMDM) and instrument-maker Yamaha Corp. (YAMCY).
No, if you want music, you’re better off sticking with the consumer-focused companiesthat steal the spotlight. Tech giant Apple (AAPL) comes to mind thanks to its iTunes service, along with streaming and satellite providers like SiriusXM (SIRI) and Pandora (P).
Though they hardly evoke the same sentiment as you’ll get from handmade, rich-sounding pianos.
As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.
Source URL: http://investorplace.com/2013/08/music-actually-sells-out-today-with-steinway/
Short URL: http://invstplc.com/1fvZa5m
Copyright ©2017 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.