Citadel Broadcasting Corp. stockprice closed Friday @ .67 cents a share. Is this company ripe for a takeover by another company? Would you invest any money in Citadel? Should I?
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Citadel Broadcasting. Is it ripe?
- Thread starter RadioStarOne
- Start date
M
MT1
Guest
The stock prices of radio consolidators (Citadel, Entercom, CC, etc...) are a reflection of the actual value of the companies. They have been in a tailspin since peaking around the time CC gobbled up AM/FM ending the "bubble" in radio stock values and holders who understood the underlying artificial inflation of the stocks sold them off in volume. Then the Perfect Storm developed with the stunning swiftness with which the New Media creamed the old and the new corporate owners of radio properties replaced broadcasters in management with MBAs and salespeople. The remaining broadcasters were neutered (for example: the title "program director" has largely been gutted and now amounts to overseeing an automation system, sometimes for several stations and consists mostly of being a gofer.)
The consolidators responded by doing what always happens when huge corporations merge... they began to shed what they mistook for expenses, their people. Voice tracking, pulling cookie cutter programs off the bird, having board operators double as news readers or hold other duties. They outsourced critical elements of their stations, blew off radio's only advantage over the New Media (local, local, local, local, local) and put their money into technology.
It never entered their minds that the actual value of their properties was the talent in the building and not an expense but in fact the very investment that made the industry profitable. They still don't get it and the carnage continues. You can track the acceleration of the broadcast company stock price plunge on a graph and see that the more they cut "expenses" the lower the price goes.
I'm afraid that the business has passed the point of no return in that regard because while the MBAs have been wrecking the business and ignored their customers wants and needs (the listeners in their community) those customers have all but eliminated radio as a primary source of news, information and entertainment as new and more responsive media spread like wildfire.
In my opinion, buying old media stock (radio, tv, print) is about as pointless as buying a house in the 9th Ward of NOLA the day before Katrina in terms of being a safe investment. Better you should take your 67-cents and throw it into a slot machine at an Indian casino. At least there you have a tiny chance of getting your money back.
The consolidators responded by doing what always happens when huge corporations merge... they began to shed what they mistook for expenses, their people. Voice tracking, pulling cookie cutter programs off the bird, having board operators double as news readers or hold other duties. They outsourced critical elements of their stations, blew off radio's only advantage over the New Media (local, local, local, local, local) and put their money into technology.
It never entered their minds that the actual value of their properties was the talent in the building and not an expense but in fact the very investment that made the industry profitable. They still don't get it and the carnage continues. You can track the acceleration of the broadcast company stock price plunge on a graph and see that the more they cut "expenses" the lower the price goes.
I'm afraid that the business has passed the point of no return in that regard because while the MBAs have been wrecking the business and ignored their customers wants and needs (the listeners in their community) those customers have all but eliminated radio as a primary source of news, information and entertainment as new and more responsive media spread like wildfire.
In my opinion, buying old media stock (radio, tv, print) is about as pointless as buying a house in the 9th Ward of NOLA the day before Katrina in terms of being a safe investment. Better you should take your 67-cents and throw it into a slot machine at an Indian casino. At least there you have a tiny chance of getting your money back.
It takes a lot longer ... even with "fancy accounting" for a stock priced at today's $.47 a share to rebound to where one makes decent money, rather than just break even.
This stock, among several other of the conglomerates, as well as SiriusXM, face much difficulty in the Wall Street selloff.
The future is more of the same cutbacks, as credit is not easy to leverage at this point. (If you were a major commercial lender, would YOU lend CDL millions in this market?)
The radio "business" economy is in deep trouble.
This stock, among several other of the conglomerates, as well as SiriusXM, face much difficulty in the Wall Street selloff.
The future is more of the same cutbacks, as credit is not easy to leverage at this point. (If you were a major commercial lender, would YOU lend CDL millions in this market?)
The radio "business" economy is in deep trouble.
oaktree said:The radio "business" economy is in deep trouble.
It's the proliferation of advertising channels. Advertising is like any commodity in that the more there is available to sell, the less it's worth. Last night I saw an ad for an NBC TV show in a frame over a urinal in a bar. This is ad revenue that might have gone to radio in the past.
Today Citadel closed at .55 and SiriusXM Closed at .50006 and in after hours trading it is at .50 even. We are all in for one heck of a rough ride. I hope the folks at KGO have their seatbelts fastened tight and are holding on for the next dip...
... after sinking to $.45 a share two hours before the close today.
No, Farid didn't by any substantial share of stock in Citadel today. It traded at less than it's average daily share, lost 30% at one time today of it's remaining corporate worth and still took a beating to $.55 a share.
If he had bought that much stock, the share cost would have gone up a lot more than a rebound dime a share.
Plus, Farid has lots of stock that is now worth little ... diving from $22 a share to $.55 a share in 18 months.
But ... he does make $11 million a year ... tax free. Not a bad deal.
No, Farid didn't by any substantial share of stock in Citadel today. It traded at less than it's average daily share, lost 30% at one time today of it's remaining corporate worth and still took a beating to $.55 a share.
If he had bought that much stock, the share cost would have gone up a lot more than a rebound dime a share.
Plus, Farid has lots of stock that is now worth little ... diving from $22 a share to $.55 a share in 18 months.
But ... he does make $11 million a year ... tax free. Not a bad deal.
Citadel was down as low as .33 today and closed at .36. In after hours trading SiriusXM is at 0.4595 Again I ask is it ripe for a takeover by another radio group?
C
checker758
Guest
RadioStarOne said:Citadel was down as low as .33 today and closed at .36. In after hours trading SiriusXM is at 0.4595 Again I ask is it ripe for a takeover by another radio group?
It sure looks like a pretty good deal right now, but who would be in a position to take it over? Isn't everyone else suffering right now too?
A deal for what?
You don't invest for what is ... you invest for what will/can be.
Imagine the DEBT Citadel has with a company that has lost zillions and 90%+ of it's corporate worth? (The operating revenues are, for this second, doing ok ...)
The problem is, would you invest for a return-on-investment, to see YOUR stock sink to $.36 a share? I'd think not.
Why?
Investors want to MAKE MONEY ... on SURE THINGS ... not on penny stocks. There's no patience in doing that ... especially in a company that hasn't gotten above $1 share in a couple months ... and has sunk like a rock from $11 a share 18 months ago.
You buy stocks that grow from the bottom ... not drop from the top to rock bottom.
Want a bargain? Buy a Snickers "big" bar.
Who would buy it? A company with lots of extra capital in cash on hand. Tribune would be a good choice. Bonneville, maybe. But I'd not hold your breath, though Tribune would be my bet. Randy Michaels plays on!
You buy assets ... not massive debt -- or a company with little hope of investor growth. You buy with other people's money, not your own.
Obviously, not a lot of investor confidence and certainly no bank confidence in the broadcasting market right now.
You don't invest for what is ... you invest for what will/can be.
Imagine the DEBT Citadel has with a company that has lost zillions and 90%+ of it's corporate worth? (The operating revenues are, for this second, doing ok ...)
The problem is, would you invest for a return-on-investment, to see YOUR stock sink to $.36 a share? I'd think not.
Why?
Investors want to MAKE MONEY ... on SURE THINGS ... not on penny stocks. There's no patience in doing that ... especially in a company that hasn't gotten above $1 share in a couple months ... and has sunk like a rock from $11 a share 18 months ago.
You buy stocks that grow from the bottom ... not drop from the top to rock bottom.
Want a bargain? Buy a Snickers "big" bar.
Who would buy it? A company with lots of extra capital in cash on hand. Tribune would be a good choice. Bonneville, maybe. But I'd not hold your breath, though Tribune would be my bet. Randy Michaels plays on!
You buy assets ... not massive debt -- or a company with little hope of investor growth. You buy with other people's money, not your own.
Obviously, not a lot of investor confidence and certainly no bank confidence in the broadcasting market right now.
If it gets any worse then someone or a large group of shareholders are going to want to take the company apart to make at least a little of their investment back. So when they start selling who will be the buyers. Seems there are a lot of valueable stations that will be available for sale. KGO, WABC, and a lot of others come to mind at fire sale prices too.
M
MT1
Guest
Oaktree is right, buying any major radio stock now buys you a piece of an increasing debt load, the assets have been, and continue to be gutted from the physical properties. For example,here was another blood bath last week, this time the Grim Reaper visited upon KNX and KFWB in LAX, taking two dozen bodies with him. If you can believe it, that market has also had major firing of whole slews of sales people too.... nice huh? Who needs a salesman when there is no product to sell seems to be the operational concept.
KGO and WABC are valuable only in that they have not shed their assets ... their people. But that won't last. Phil Boyce is out at WABC after 14 years, look for that station to slowly decay. At KGO Jack Swanson is going to have his hands increasingly full keeping the Cit-Suits at bay and sooner or later they will destroy that radio station too.
The physical properties are worth only the value of the buildings and the land, the equipment not so much, the signals are worth something only if they are used and not just kept busy pumping electricity into the air for no good reason and the debt is worthless. If you drop a few hundred bucks on a single share of Google you are buying a piece of a cash reserve in the billions, similar cash flow, massive future revenue and you are buying into success. Why would you spend even 37-cents to buy a piece of failure?
If the owners were smart they would be selling off the KGOs, WABCs, KOGOs, WRKOs, WLSs, etc...before rigamortis sets in, but we know that they are not smart, they are in fact quite stupid and hence their plight.
If your broker suggests that you buy penny stock shares of massive debt that is the time to run.
KGO and WABC are valuable only in that they have not shed their assets ... their people. But that won't last. Phil Boyce is out at WABC after 14 years, look for that station to slowly decay. At KGO Jack Swanson is going to have his hands increasingly full keeping the Cit-Suits at bay and sooner or later they will destroy that radio station too.
The physical properties are worth only the value of the buildings and the land, the equipment not so much, the signals are worth something only if they are used and not just kept busy pumping electricity into the air for no good reason and the debt is worthless. If you drop a few hundred bucks on a single share of Google you are buying a piece of a cash reserve in the billions, similar cash flow, massive future revenue and you are buying into success. Why would you spend even 37-cents to buy a piece of failure?
If the owners were smart they would be selling off the KGOs, WABCs, KOGOs, WRKOs, WLSs, etc...before rigamortis sets in, but we know that they are not smart, they are in fact quite stupid and hence their plight.
If your broker suggests that you buy penny stock shares of massive debt that is the time to run.
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