It’s going down, I’m yelling timber….
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Audacy Stock Trading Halted
- Thread starter JJSPC
- Start date
Has the company done anything that would give investors more confidence?
This is why I said that David Field and his father need to take the company private. Pay off the remaining institutional investors, and deal directly with the lenders. Use the stations as collateral. They could sell one station and buy out all of the remaining stockholders. Because playing with Wall Street is just a waste of time, and embarrasses everyone involved.
But what if the value of the stations isn't up to par according to lenders? For example; it used to be that value was based on existing and estimated revenue, times-whatever multiple for future growth. It's pretty clear that Wall St., private equity, and individual banks, no longer see a future growth potential for traditional media assets. All that's left would be 'stick value', and I'm pretty sure, in spite of what media people like us believe, that the stick value of all the Audacy stations wouldn't cover the nut for the amount needed to buy back enough shares, especially at their depressed value.
I agree, but it's just not that easy anymore. Especially when a company still carries debt on AM stations.
No. They just reported a loss of $26.65 per share in one quarter, for Pete's sake!
The stations are already collateral for Audacy's lenders. There's no more lemonade in that lemon. If there was, Audacy would be moving to leverage it, for example by issuing new bonds with a multi-year expiry date to pay down 2023 and 2024 debts.
Yet I'd be willing to bet that David Field finds enough money to pay himself and a few other execs nice bonuses despite tanking the stock.
Were the banks to bring an outside "crisis manager" experienced in this sort of situation, they would likely make considerably more than that!
The lenders are not the stockholders. I'm saying they should go private. From what I can see, the top 25 stockholders own a total of 790,000 shares. Multiply that by $1. How much is that? Less than $1 million. You don't think Field can afford that? Maybe give them a bonus to make it worth their while. Then they don't have to deal with this anymore, and can focus on the lenders. Once that situation is resolved, go public again.
I'm sure that's one of the options they're discussing. But the lenders have signed NDAs and Field isn't doing public earnings calls anymore. So we likely won't hear anything until they get a deal.
But you know as well as I that there are additional legal fees to make application to the SEC to change status, all the filings requiring approval, etc. There's many more lawyer costs ahead than just dollar per share buyouts. Audacy likely have enough cash reserves right now to just buy $800K worth of shares without putting stations on the block. It's all the other costs to go public to private that's the b*tch.
That said; I agree going private is the only option. None of us can predict the future, but it's pretty fair to say the days of traditional media companies going public are over. Going private essentially slows the leaks in the already leaky boat.
Or at least hides them somewhat.
Going private without simultaneously resolving the debt situation accomplishes nothing. Investing meaningful equity capital into a company that is at high risk of going BK irrespective of such investment would be a very foolish move.
I do think in connection with a fulsome in court or out of court reorganization, in which existing shareholder value is likely to be entirely or nearly entirely wiped out and existing lenders are likely to become large shareholders (barring occurrence of the "buy out" scenario I mention below), a move to go private is possible.
That said, the equitizing lenders might believe their post-reorg shares are more easily monetizable if shares were to remain public.
A go-private scenario would be most likely to happen if a suitor (i.e. an investor or private equity) were to come along and invest new money in connection with a reorg and essentially "buy out" the existing lenders.
I do think in connection with a fulsome in court or out of court reorganization, in which existing shareholder value is likely to be entirely or nearly entirely wiped out and existing lenders are likely to become large shareholders (barring occurrence of the "buy out" scenario I mention below), a move to go private is possible.
That said, the equitizing lenders might believe their post-reorg shares are more easily monetizable if shares were to remain public.
A go-private scenario would be most likely to happen if a suitor (i.e. an investor or private equity) were to come along and invest new money in connection with a reorg and essentially "buy out" the existing lenders.
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What has it been...five or six years since the then Entercom acquired the CBS Radio properties?
Fresh new money is always preferable to stinky old money, and I'm guessing the lenders are looking for an exit strategy from a company that has no discernable plan for growth. Who would want equity in this? Not me. So the question is how many years do you hold on to an investment before you cut & run? Consider what iHeart and Cumulus have delivered to their equity holders since they went bankrupt. I doubt this group could deliver as much.
The one thing Audacy has not done yet (AFAIK) is file for a waiver to the foreign ownership rules. Time to file.
The deal closed in November of 2017.
Teddy Forstmann waited 8 years before he decided to cut & run from Citadel.
Wondering out loud what the stock price was back then, and how excited the shareholders were for the future of the company and their investment.
Around $11. Stockholders didn't have much choice. The way the deal went was CBS Corporation spun off the radio division to CBS shareholders, who then owned 72% of the combined radio company, If they were smart, they quickly sold those shares.
That's $11, pre-reverse-split. So that would be $330 if you wish to compare to the $1.09 now.
Seems like anyone who was smart bailed on Entercom/Audacy early on.
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