Universal Music Group stock logged its steepest decline since the record label behind Taylor Swift, Lady Gaga, and Bad Bunny went public in 2021, after revenue from subscriptions disappointed investors.

Shares in the world's largest music company closed 25% lower in Amsterdam on Friday, trumping a 23.5% dive on July 25, 2024 that was also triggered by weak revenue growth from subscriptions and streaming.

Those services boomed at the height of the pandemic, when listeners turned to digital platforms to enjoy their favorite artists after coronavirus restrictions brought live concerts to a standstill.

Growth has cooled in recent years, but subscriptions and streaming remain a key focus for investors as they are part of the group's recorded music business, which accounts for the lion's share of revenue.

Universal Music on Thursday posted second-quarter revenue of 3.29 billion euros, equivalent to $3.79 billion, a figure that includes contributions from the acquisition of Downtown Music Holdings that Universal's Virgin Music Group completed in February.

However, analysts and investors are focusing on Universal's underlying performance without the Downtown acquisition. Revenue from subscriptions grew 6.7%, below consensus of 9.3% and marking a slowdown from growth of 7.9% that Universal recorded in the first quarter.

Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization--Universal's preferred measure of profitability--came in at 664 million euros without the Downtown acquisition, also below consensus of 703 million euros.

Bernstein analysts wrote in a note to clients that Universal's second-quarter figures were underwhelming on all fronts and indicated that a potential improvement in streaming subscriptions revenue had been delayed to the second half of the year.

Universal stock is down more than 40% over the past 12 months as investor hopes of a significant rebound in subscriptions and streaming revenue growth never materialized.

Friday's share rout came about two months after the company's board unanimously rejected a $65 billion bid from Bill Ackman's Pershing Square Capital, saying the proposal undervalued the group.

The billionaire had sought to get Universal listed in the U.S., saying its stock price had languished due to what Pershing called uncertainty in relation to Bollore's stake in the company, the underutilization of UMG's balance sheet and the lack of a publicly disclosed capital allocation plan.

The record label said in response that it had expanded its 500 million-euro share buyback to 1 billion euros, and would sell half of its roughly 3% stake in Spotify Technology and channel funds to buy back shares.