T4F (SHOW3): shares fall almost 10% after tragedy and successive problems involving Taylor Swift concert

Despite the sales success involving tickets for American singer Taylor Swift’s concerts in Brazil, which began last weekend in Rio de Janeiro, the common shares of T4F (SHOW3), or Time For Fun, fell 9.65 % (R$ 2.06) in this Monday’s session (20). The retreat was largely due to all the controversies surrounding the events.

On Friday (17), the day that the first concert of the tour was held in RJ, a 23-year-old fan fell ill inside the concert venue, the Nilton Santos stadium, and later died due to a cardiorespiratory arrest .

On social media, a barrage of comments blamed T4F for the tragedy, alleging that the promoter had not provided water in an environment with a thermal sensation of more than 60ºC. Furthermore, fans who went to the show also reported problems with the organization of the event, confusion in the queues and poor structure.

Amid criticism, T4F changed its stance and said it would allow access to plastic bottles at upcoming events, as well as sealed glasses of water. The company also informed that it would provide free water in the queues and at all accesses and entrances to the stadium and inside.

On Saturday (18), authorities at all levels of government asked for clarification. The governor of Rio, Claudio Castro (PL-RJ), informed that the Civil Police will investigate the case, while the Minister of Justice, Flavio Dino, ordered the National Consumer Secretariat (Senacon) to adopt immediate measures.

After the problems, the singer’s show that was scheduled for Saturday was postponed until this Monday, with thousands of people already inside the stadium – generating more anger and negative comments. T4F opened the possibility of refunds for fans who would attend the show on Saturday and cannot attend today.

Impact on T4F shares

“The value of a company is given by the sum of free cash flows that it is expected to generate over the life of the company”, explains Felipe Pontes, co-founder and equity specialist at L4 Capital.

“Problems like this weekend bring several uncertainties regarding the free cash flows that the company will be able to generate. They can generate lawsuits against T4F, which will possibly cause losses and cause less money to come in in the future”, he adds.

Other than that, the expert also highlights that there is a negative impact on the company’s brand.

“Events may generate distrust among customers and business partners regarding the company’s ability to hold major events from now on. This would generate, once again, less cash flow”, he explains.

Taylor Swift’s show came at a not very positive time for T4F, when the company was struggling to regain its relevance after successive problems.

At the beginning of September last year, the company’s shares were hit by the suspension of singer Justin Bieber’s shows. At the end of March this year, another negative news: T4F was no longer responsible for Lollapalooza Brasil, which was transferred to “Rock World”.

“There were two important losses for the company in the short term, which exceeded the revenue projection”, pointed out Luiz Souza, variable income broker at SVN Investimentos, at the time.

“What left [o mercado] What’s more exciting is the possibility of T4F getting relevant contracts again, as it suffered a lot recently with the loss of Lolla and the cancellations of Justin Bieber’s shows. In a way, it gives an idea that the company can perpetuate the contracts”, said Danielle Lopes, partner and equity analyst at Nord Research, at the same time.