The eviction of London major EMI from the FTSE 100 at a quarterly reshuffle on 10 Sep became even more likely yesterday when the company’s share price fell to its lowest level since 1987 amid fears of a profits warning and concern that it could be forced to pay out tens of millions of dollars to settle a lawsuit.
Its shares ended 11p lower at 181p after figures from the Recording Industry Association of America showed a 7% drop in compact disc shipments during the first six months of the year, just two weeks after the BPI confirmed UK figures were down. Word is the company hope new releases from Coldplay and the Rolling Stones plus strong sales of the Now 52 compilation will help maximise revenues and market share sufficiently to secure the company’s place on the FTSE 100 charts. Traders’ opinion of the group are also affected by the continuing lawsuit between the groups Virgin US division and the family of Aaliyah who are suing the company over claimed negligence in arranging the transport of their daughter.
Whether the company will survive the eviction, and if it doesn’t what affect that will have on the group, remains to be seen.