Live Nation’s stock is falling amid reports of an upcoming Department of Justice antitrust lawsuit

Shares of Live Nation Entertainment (LYV) fell more than 8% in pre-market trading later Thursday Bloomberg late Wednesday said the U.S. Department of Justice (DOJ) and a group of states plan to file an antitrust lawsuit against Ticketmaster’s parent company, a move that could lead to the company’s breakup.

A lawsuit is expected to be filed Thursday in the Southern District of New York over Ticketmaster’s dominance in concert ticket sales, and potential remedies include breaking up Live Nation, people familiar with the matter said Bloomberg.

News of the impending legal proceedings comes just over a month after Live Nation’s shares plummeted in the wake of: “Wall Street” daily reported that the Department of Justice was preparing an antitrust lawsuit against the ticket seller, alleging that it had used its market dominance to undermine competition in ticket sales for live events.

The company, which was given conditional approval by the Justice Department to merge with Ticketmaster in 2010, has since faced continued criticism from lawmakers for high prices, poor customer service and monopolistic practices. Calls to re-examine the tie-up have intensified in 2022 after the box office giant botched ticket sales for Taylor Swift’s “Era” tour, leaving some viewers stranded in online queues for up to eight hours.

If successful, Live Nation’s antitrust lawsuit would be the latest action by the Biden administration to increase competition in industries ranging from big tech to health care and grocery.

Monitor this key level as part of your message-driven selling

Since bottoming in late April of last year, Live Nation shares have been mostly on an upward trend, with the 50-day moving average (MA) crossing above the 200-day MA in mid-June, forming a golden cross – a chart pattern that technical analysts interpret as indicating the beginning of new growth trend.

After a significant pullback last month, the price has regained momentum and is now back above the 50-day MA. However, it seems that the antitrust report will change sentiment back to the bears, and the company’s shares will be significantly positive this morning.

Amid continued news-driven selling, investors should monitor the $91 level – an area on the chart where price finds support in the form of a multi-month trend line that is closely aligned with the 200-day MA. Failure to maintain this important level could result in shares falling to long-term support around $81.75.

Live Nation shares fell 8.3% to $93.00 about three hours before Thursday’s opening bell.

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