Aspiro soars as star-struck investors miss Jay-Z deal
By Sven Nordenstam
STOCKHOLM (Reuters) - Shares in Aspiro soared by 1,000 percent on Tuesday as investors clamored for a stake in the Swedish music streaming business bought by rapper Jay-Z this month - but face big losses as they will be forced to sell out to the U.S. star within days.
Jay-Z bought more than 90 percent of Aspiro earlier this month in a $54 million deal. Under takeover rules, owners of the remaining shares are required to sell them to him at the bid price - 1.05 crowns each - in a "compulsory squeeze-out" after the company is delisted on Thursday.
However investors appeared to be unaware of this requirement and piled into the stock following the star-studded launch of Aspiro's music streaming service Tidal.
Some of the world's biggest music names, including Kanye West and Madonna, were in New York on Monday to help publicize the launch of Tidal, which bills itself as the first service of its kind to be owned by artists.
Shares in Aspiro rose as much as 1,032 percent on Tuesday. They were up 938 percent at 11 crowns - about 10 times the price shareholders would be forced to sell them for - when trading was halted.
The surge had lifted shares to a level where investors faced losses of around 90 percent.
"There are reasons to suppose that some have not noticed the communication around the bid," said Nasdaq OMX Stockholm spokesman Martin Hedensio, adding the exchange saw no reason to cancel any trades.
The share price fell back as trading resumed but, despite the exchange's attempts to hammer home the squeeze-out message through two market notices and phone calls to brokers, buyers were still paying around three times the bid price. Continued...