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Radio Stocks Hot!

J

joshzz

The News is Radio Stock are hot>>

As Wall Street has climbed back, so has the value of radio stocks. On February 11, Sirius XM (SIRI) could be bought for just 5 cents a share. It opened Tuesday at 60 cents. Shares of CBS (CBS) were $3.65 on April 1, and opened today at $13.90. Cumulus (CMLS) stock was worth 45 cents in July, and opened Tuesday at $2.29. Entercom (ETM) was an 89 cent stock on March 5, and was trading on Tuesday at $7.00. Journal Communications (JRN) shares plunged to 39 cents on March 11, but have rebounded to close Monday at $3.85. Radio One (ROIAK), Entravision (EVC) and Saga (SGA) have all rebounded from being penny stocks earlier this year.

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There is no reason for such excitement. These companies are in deep trouble and yet the foolishness in Wall Street.

The very idea that someone would pay $ .60 a share for XM-SIRIUS stock mind boggling. The stock has been diluted numerous times, yet people continue to buy.. .this is the kind of madness that has put the US in a downward spiral towards becoming a third world nation...

Sirius is realistically not worth a penny a share and most of the companies mentioned above are in the same predicament. ..... a lot of people are going to lose a lot of money when reality hits.
 
If you bought at the bottom of the market, and avoided companies that are or are likely to be bankrupt, you could have made a killing with radio stocks over the past year. If you bought in 18 months ago, you're still under water on your purchase. Of course, the same thing could be said for any number of stocks in any number of industries.

Part of the reason that stocks went so low is that everybody was rushing to get out of the stock market. Part of the reason that they're going up is that smart people are sorting out the winners and losers, and are starting to get back in. I expect that we'll see some significant fluctuations as the market adjusts to the new realities of station values and revenue. Then again, I ain't a stock guru. Your guess is as good as mine.
 
Good points but I think most of the companies named are still headed into the toilet...

I can't believe anyone can be SIRIUS in believing that the satellite radio stock is a wise investment. .. notice my word play... :)
 
Radio stations obviously have value. They just as obviously aren't worth what they were a few years ago, or as little as the stock prices might have indicated a few months ago. Good companies with reasonable debt are still churning out profits. Picking the right companies, and the right timing, are key.
 
josh said:
Good points but I think most of the companies named are still headed into the toilet...

I can't believe anyone can be SIRIUS in believing that the satellite radio stock is a wise investment. .. notice my word play... :)
Click to expand...

As with other forms of media, I believe satellite radio has a place in the world.

The flaw was with the original assumption being the subscription satellite model would greatly impact traditional terrestrial radio, thus allowing satellite to gain revenue from both subscription and eventually advertising. Clearly that didn't happen and the over-the-top investments into facilities and the most expensive radio transmitters ever, satellites, has created a huge hole for them to dig out of.

That being said, I think that satellite will scale down to a reasonable level of talent and operating costs to eventually improve their margins and serve the audience they're best at serving; long-haul truckers, rural communities without access to decent professional local radio and listeners who prefer commercial-free music radio.

The biggest thing satellite radio can do is divest itself of the management folks that came from terrestrial radio who appear to be trying to run satellite like terrestrial radio.
 
In my opinion, and I could certainly be wrong.. SIRIUS cannot survive due to debt load. Even in a good economy it would go under. The entire model for success was completely flawed.

I have mulled over this and have come up with only one viable solution. Give it away for free to ALL potential listeners and run it like commercial radio ----- Sells lots of ADS, ADS, ADS, and offer stations devoted entirely to offering brokered time... It's advantage over local radio stations - no territorial boundaries.

Without taking drastic measures, I see no future in SIRIUS...
 
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