Eventim’s New Dimension

CTS Eventim chief Klaus-Peter Schulenberg says his company’s deal with Live Nation "opens up new dimensions" for the German ticketing giant to expand its international business "on a large scale within a short period," but it seems that nobody at the country’s stock exchanges is taking any notice of him.

Despite forecasts that within six years the partnership with LN will generate up to 60 million extra tickets and additional annual revenues of more than euro 100 million a year, Eventim’s stock price is still finding a glass ceiling a little below the euro 30 mark.

Six months ago the shares were up at euro 36.28, but on July 10 investment analysts SES Research published a report – headed "The Completely Wrong Price" – that argued that the historically acquisitive company is running out of room for expansion. Investors took the tip and the unit price plunged nearly 30 percent from euro 36.28 to euro 26.55 within a week.

The company might reasonably have expected the announcement of the LN deal would make a nonsense of the SES report because it gives it a foothold in U.S. and Asian markets, but the tip of the share price spike didn’t poke through the glass ceiling for long.

At the time of Live Nation’s January 11 press call to unveil the new agreement and a similar one from Eventim three days later, when Schulenberg made those comments about opening up "new dimensions," it did show a few cents more than that euro 30 barrier. But it plunged back to less than euro 25 within days.

This time it wasn’t due to any analysts’ report saying the company was in a straightjacket over expansion, but a global stock plunge due to investors fearing the onset of a bear market.

"Small and mid caps [stocks with a relatively small market capitalization] got under bad pressure worldwide, and particularly in Germany the market got pulled down severely," Eventim legal and communications chief Rainer Appel told Pollstar, as the share looked to be rallying to close out January at about euro 26.50.

"Although this [pressure] was mainly triggered by the recent real estate and banking crisis, almost no company’s shares were left unharmed – and that included ours," he explained.

Appel was furious with last year’s SES report on Eventim and described it as "misleading" and "objectionable," while investors who believe the expert analysts called it wrong might agree with his view that the current share value is too low.

"At the recent price, our shares appear to be significantly undervalued. We firmly believe that the progress CTS Eventim has been making and continues to make will soon reflect in our stock," he said.

"For Eventim, it does not only mean market entry for our software and systems in North America, but it will also enable us to implement our European growth strategy much faster, to expand our footprint virtually all over Europe, and to become one of the leading players in markets that we have little or no presence in so far.

"We expect to double the number of tickets sold over our systems worldwide in the mid-term. The revenues of our ticketing division will go up significantly, and with the synergies and economies of scale that apply we also expect our margins to increase."