An article in AllAccess reports that the company is stating, "We are business as usual." They will be delisted from the NY Stock Exchange, for now, but hope to return after executing a reverse stock split. Management also asserts that they will "work" to refinance their debt, which only starts becoming due in July 2024.
-
Get involved.
We want your input!
Apply for Membership and join the conversations about everything related to broadcasting.
After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
If you use a disposable or false email address, your registration will be rejected.
After your membership is approved, please take a minute to tell us a little bit about yourself.
https://www.radiodiscussions.com/forums/introduce-yourself.1088/
Thanks in advance and have fun!
RadioDiscussions Administrators
Audacy Stock Trading Halted
- Thread starter JJSPC
- Start date
So Audacy ends up on the pink sheets for a while. It may affect the company's image but, as long as they're not trying to raise more capital by selling more equity, that's about as far as it's likely to go. Any bankruptcy proceeding would be much more closely linked to the company's ability to pay down debt from operating revenues.
Imagine this: Imagine running a company that your father started...and that he is the largest single shareholder in the company.
And you get delisted because your stock price is under 10 cents a share.
That's the situation, and why I say that this is not like iHeart and Cumulus.
Joesph Field, David's father, owns 18% of Audacy stock. If it goes bankrupt, he loses.
David Field, Joseph's son, owns about 4% of the company stock. So that's 22%.
And you get delisted because your stock price is under 10 cents a share.
That's the situation, and why I say that this is not like iHeart and Cumulus.
Joesph Field, David's father, owns 18% of Audacy stock. If it goes bankrupt, he loses.
David Field, Joseph's son, owns about 4% of the company stock. So that's 22%.
That sounds more like a problem for Ann Landers than Irving R. Levine.
David Field didn’t have to do a Reverse Morris Trust merger to get CBS Radio. That part is 100% a self-inflicted wound and something Joesph would not have done.
You don't think the company's largest stockholder had a say in that? Joseph sits on the board, and the board approved the deal.
Ther's a saying in real estate, "you make your money when you buy, not when you sell." The same holds true in radio, if you vastly overpay, it will come back to haunt you.
By how much did they 'overpay?' I read this all the time, but if they overpaid, why did the lenders give them money?
Have you ever bought a house? One of the things that happens is the lender does an appraisal and tells you if you overpaid.
The lenders approved this deal. Everyone approved this deal. The time to say they overpaid is when they bought. Not now.
So what went wrong? The stock is worthless and the company has massive debt. Whatever business model they used failed...
Two words: The pandemic. Did you hear about it? It was in all the papers.
As someone who has borrowed money: Debt doesn't matter until it's due. It's not due until next year.
It’s not that they overpaid, it’s that the newly formed Entercom was saddled with debt from CBS, thus, it had no chance to succeed.
Hindsight may be 20/20 but I have yet to see a Reverse Morris Trust merger that actually worked out long-term for the combined entity. Citadel—ABC Radio, Discovery—WarnerMedia and Entercom—CBS Radio were all RMTs. The first failed, the second is doing poorly and the third is failing as we speak.
The purpose was for the seller to avoid capital gains taxes, and in every case it worked.
It worked for CBS, they got rid of debt and paid no taxes.
It failed disastrously for Entercom-Audacy and the Field family, they have debt suffocating the company and the public indignity of a delisting.
They were going to get at least $2 billion in debt regardless, right? CBS wasn't going to donate the stations. So there was debt.
Once again, the lenders knew what was happening. All sides had lawyers and accountants. Anyone could say stop.
It still doesn’t excuse what a horrible deal it turned out to be and a rather lopsided deal for the selling party. Blame goes all around with this.
You should be in Congress. Blaming the Pandemic is a cop out. It's a factor, but not the main one. David Field wanted to expand his Empire. He came from Goldman Sachs. As for the debt, yeah he's hoping to kick the can down the road. He will fill some suitcases filled with cash and head down to Paraguay...
You said it: Hindsight 20/20. Nobody spoke at the time. Too late now.
They did the math. They figured out the payments based on expected revenues. Then the revenues changed. Whoops!
But to say they overpaid or blame the deal ignores the real reason they're in trouble, and it's that revenues dropped.
No, it's the factual reason. They were doing fine until the pandemic and the revenues dropped.
Here's analysis from 2 years ago. This was before the current economic slowdown:
Audacy Stock: Price Down, But Improved Clarity On Outlook (NYSE:AUD)
Since mid-2021, Audacy has been beaten down by the Delta variant, supply chain shocks, & now Omicron. Learn more about AUD stock here.
seekingalpha.com
The analysis blames the pandemic followed by the non existent recovery.
No one radio chain is having this problem and they had to deal with the pandemic, too.
- Status