SFX Entertainment Inc. (SFXE) held its initial public offering (IPO) Wednesday morning, selling about 3.8 million shares at an IPO price of $13, the top of its proposed range of $11 to $13 a share. Shares have since dropped below the lower end of that range.
SFX was founded by Robert F.X. Silverman and focuses exclusively on concerts and festivals devoted to electronic dance music (EDM), or what the company calls electronic music culture (EMC). In its IPO filing, SFX claimed that the market for EDM will total $4.5 billion in 2013 and that the five largest EMC festivals grew at a pace of 41% annually from 2007 to 2012, while the overall North American concert market grew by just 2%.
ALSO READ: Ten Brands That Will Disappear in 2014
Electronic dance music clubs have become a fixture in Las Vegas, where casino and resort owners like Wynn Resorts Ltd. (WYNN) operate massive dance clubs that can haul in revenues of up to $1 million a night from as many as 10,000 revelers. In a recent article in The New Yorker, one club owner said, “Half of [Wynn’s] profit comes from the night clubs. Gambling is an amenity now.” A Wynn spokesman disputed the numbers, but did not offer accurate ones.
ALSO READ: America's Richest (and Poorest) States
Shares of SFX are trading at around $10.75 midway through the lunch hour on Wednesday. The stock’s high for the day was $13.39.