Weak Opening for SFX Entertainment

Wall Street, it seemed, was not much in the mood to dance on Wednesday morning.

Shares in SFX Entertainment, a young company based on the electronic dance music phenomenon, began trading on Nasdaq, and the stock was down about 15 percent at midday, to about $11 a share after opening at $13.

SFX Entertainment was founded a year ago by Robert F.X. Sillerman, the media impresario who corporatized the concert industry in the 1990s and later owned the Elvis Presley estate and the company behind “American Idol.”

The new company’s goal, as Mr. Sillerman has said in interviews and in recent investor road shows, is to make money from the world of dance music, which has existed on the margins of the music industry for decades but has lately become its hottest genre. Top festivals like Electric Daisy Carnival and Ultra regularly draw hundreds of thousands of glow stick-waving revelers. The global market for dance music â€" including live events, recordings and corporate sponsorships â€" has been estimated at $4.5 billion a year.

SFX raised $260 million in the initial public offering and plans to use about $150 million of that to complete acquisitions for festivals, promoters and other dance companies. Among the properties it has already bought or is under contract to buy are ID&T, the Dutch company behind the Tomorrowland and Sensation festivals; Made Event, which presents Electric Zoo in New York; and Beatport, the dance music version of iTunes.

Although electronic dance music has remained popular in Europe for decades, it has only recently established itself as a large-scale mainstream force in the United States, and some analysts and music industry commentators have questioned whether its popularity among Americans will be a passing fad. SFX acknowledged that risk in its prospectus.

“While interest in electronic music has increased significantly over the past few years, this increase in interest may not continue,” the company said, “and it is possible that the public’s current level of interest in electronic music will decline.”