The answer to your question is yes and no.I came across this today, IHrt has been slashing positions since Thursday, something we are getting used to on a regular basis....
But apparently someone at the publication Barons feels IHrt is tanking in a huge way, and the stock price is in free fall
Interesting read.
IHeartMedia Stock Tumbles as Morgan Stanley Turns Cautious on Ad Outlook
Analyst Benjamin Swinburne cut his rating on the company to Underweight from Equal Weight, with a new price target of $11, down from $25.www.barrons.com
There’s trouble coming in the advertising market, and that is not good news for investors in iHeartMedia IHRT –10.85% , the largest U.S. operator of radio stations.
IHeart shares (ticker: IHRT) are getting clobbered on Friday after Morgan Stanley media analyst Benjamin Swinburne cut his rating on the company to Underweight from Equal Weight, with a new price target of $11, down from $25. IHeart stock was down 12.8%, at $9.57, in recent trading. The S&P 500 SPX –2.91% was down 2.8%.
For the year, iHeart shares are down 55%.
Swinburne says a possible recession and the company’s highly leveraged business—the company has more than $5 billion in net debt, with a market cap of just $1.5 billion—creates “outsized risk to the equity.” He also sees the company’s core broadcast radio business “as structurally challenged by shifting consumer listening habits.” And he notes that while iHeart’s digital audio business is growing impressively, it has lower margins than the core broadcast business.
MODERATOR NOTE; Post exceeded fair usage so the core statements were preserved.
IHeart is heavily leveraged so a relatively small revenue shortfall can cause magnified financial issues. Leverage magnifies gains AND losses. IF we‘re looking at a continued serious ad recession,yes, IHeart would suffer even more than most due to that leverage and would have to likely reduce costs which almost always translates into job cuts (by far their largest expense).
So you can connect a few dots here and make guesstimates your HOW they’d reduce costs. A sustained ad recession would put IHeart in serious jeopardy AGAIN. But hey theyve spent more time dealing with bankruptcy issues than playlists in their existence. I’d rather work there than own a stock that may have little or no value from a balance sheet perspective. Employees will leave and go elsewhere. Investors could LOSE what they put in…permanenty.