SFX Entertainment bounces back, stock jumps 11%

SFX Entertainment’s share price made a comeback last Friday, closing the week out at 94 cents after weeks of struggling to make it back past the $1 mark.

The electronic music juggernaut’s 11% jump came shortly after Albert Fried analyst Rich Tullo put a $5 target price on the company, claiming that the price is undervalued in comparison to similar companies. An almost 500% increase on the current price per share, Tullo’s target was based on how much cash SFX’s festival attendees are forking out at their events in comparison to similar music events like C3 and Bonnaroo.

The share jump comes after a lengthy run of credibility and financial woes for the troubled company, which owns Australia’s own Stereosonic festival.  September saw the company issue refunds to thousands of TomorrowWorld festival-goers who were left stranded overnight at the event after bad weather made the site inaccessible. In the same month, SFX was also hit with a lawsuit after CEO and chairman Robert Sillerman allegedly misled investors ahead of a bid to take the company private.

Despite the lawsuit, SFX still managed to raise $90 million in new investment last month, with stock having been purchased by "new and existing" investors to secure "capital for new initiatives and operating and working capital needs".

Sillerman brands the financing as a way to steady the ship: "While the company continues to explore strategic alternatives, this solidifies SFX for the short and long term, so we can focus on producing great festivals and events and operating globally recognized digital properties."