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HeartMedia shares drop amid warning it may not survive another year,...any thoughts?

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SP447

The shares of radio and billboard giant iHeartMedia Inc. have tumbled 27.3 percent since the company warned investors last Thursday that it may not survive over the next 10 months.
The shares closed at $2.10 Monday.
The San Antonio company’s stock, which reached an all-time high of $18.95 in 2008, has plunged under its crushing debt load — largely stemming from its acquisition that year by two Boston private equity firms.

http://www.mysanantonio.com/busines...res-drop-amid-warning-it-may-not-11095729.php
 
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Keep in mind that the radio division of iHeart is not a publicly traded company. So its stock is not on the market. This article is wrong. They're comparing apples and oranges.
 
The public stock being referred to could be impacted by the issues facing the radio division. You are correct, but the article is also correct insomuch as the pressures on the stock being referred to are as a result of the radio divisions financial issues.

None of this is a surprise. It's been well known for some time that iHeart is over leveraged and a financial restructuring would occur at some point. Were I to guess, I'd say there would be a prepackaged bankruptcy action with significant equity being transferred to debt holders in return for a lot of debt being cancelled. Some assets may be divested. I don't see the digital platform being separated because I don't think it can be, at least not effectively. The company that comes out of this should be far better equipped to operate the stations as it won't be nearly as hobbled by debt payments.
 
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