Cumulus stock worth less than a candy bar !!!

Are they about to go under? Their stock was worth 99 cents a share yesterday. Did you know that on 10-13-2016 they did a REVERSE stock split? In that split investors got one share out of 8 and they got the other 7! So basically they are running the company at shareholders expense. I would have been better to invest my money in "anything" (toilet paper, gym clips, pencils) other than Cumulus. They suck!

https://globenewswire.com/news-rele...en/Cumulus-Announces-Reverse-Stock-Split.html

I wondered why they didn't do a 1 for 100 reverse split when they did. The last reverse split still left the stock with a dangerously low price to avoid delisting.

gregg75 said:

Are they about to go under? Their stock was worth 99 cents a share yesterday. Did you know that on 10-13-2016 they did a REVERSE stock split? In that split investors got one share out of 8 and they got the other 7! So basically they are running the company at shareholders expense. I would have been better to invest my money in "anything" (toilet paper, gym clips, pencils) other than Cumulus. They suck!

https://globenewswire.com/news-rele...en/Cumulus-Announces-Reverse-Stock-Split.html

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The reverse split is pretty well-known. So yeah, the unadjusted price would be about a quarter. What is hard to get used to is that the market capitalization of the whole shebang is now only $29 million. Meanwhile Entercom, which was far more careful with acquistions today announce a merger with CBS Radio. Good job by David Field and company.

As for Cumulus "going under". I doubt stations are going off the air but some kind of drastic reorganization and/or sale of assets wouldn't surprise me.

Well they are not doing something right. I think even I could run the company and get their stock above 99 cents a share! If that's the best they and their board of directors can do, then they need to give it up and open some Dollar Generals.

The reason the stock price is so low has to do with their $2 billion is debt. Lew Dickey created the debt and didn't have a plan for it. That's why the board of directors replaced him. The current CEO has made addressing the debt their main target. But it takes time. They have an offer out to buy down some of that debt, and there are deals in the works to sell off two big parcels of land that will net about $250 million. If those deals get done, plus they improve revenues, they can wipe out a big chunk of the debt. Not saying that will make the stock worth buying, but it will remove a major reason why it's where it is now.

They could start to "improve revenue" right here in Atlanta. 106.7 has been under performing. Last month it got beat by a translator (6+). When there is a station on the same tower but at a lower power (104.7) out billing 106.7 around 2 to 1 someone should be fired.

Also, Cumulus has a number of groups in 200+ radio markets, such as Columbia/Jefferson City MO, Bloomington/Normal IL, Columbus/Starkville MS, Abilene TX, Wichita Falls TX just to name a few that would be prime candidates to spin-off, unless they're generating an out-sized portion of revenues compared to market size. Would it be a stretch to suggest their holding in the 200+ markets might raise another $100 million or more?

secondchoice said:

When there is a station on the same tower but at a lower power (104.7) out billing 106.7 around 2 to 1 someone should be fired.

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They did. They already replaced the market manager a while ago. Obviously there're more to the story.

joebtsflk1 said:

Would it be a stretch to suggest their holding in the 200+ markets might raise another $100 million or more?

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Big stretch. The biggest problem is finding buyers.

A few of these clusters might be a good fit for Saga, such as Columbia/Jeff City, the Texas clusters, maybe one of the Illinois clusters.

DavidEduardo said:

That's not how a reverse split works. "They" didn't get the other 7. If there were 7 million shares before, there are 1 million now. The idea was to have each new share worth 7 times the value of one previous share.

Share price does not determine the survivability of a station group. The balance sheet and P&L decide that.

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Correct. The stock was split to avoid being de-listed on NASDAQ. Share price must be maintained above $1/share. If below $1/share for a prescribed period the stock is de-listed. It would then go to a less traded board...
BTW..12% jump today after 3P. Volume was 10 times normal. Anybody know what's up?

DavidEduardo said:

Share price does not determine the survivability of a station group. The balance sheet and P&L decide that.

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And Cumulus's balance sheet looks pretty decent. $33 million in net profits in the first 3 quarters of 2016, and their cash position has been improving. They haven't been actively paying down the debt in recent quarters, but as TheBigA said they began doing so in the 4th quarter. Their 4th quarter earnings next month should be very interesting.

Cumulus's future:

http://www.rd.com/funny-stuff/work-cartoons/28/

PTBoardOp94 said:

And Cumulus's balance sheet looks pretty decent. $33 million in net profits in the first 3 quarters of 2016, and their cash position has been improving. They haven't been actively paying down the debt in recent quarters, but as TheBigA said they began doing so in the 4th quarter. Their 4th quarter earnings next month should be very interesting.

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There is a part of me that says I should buy a couple thousand shares of Cumulus stock...there's another part that completely agrees with Leslie Moonves and can see no real growth in radio,as a business or as an investment.

wavo said:

There is a part of me that says I should buy a couple thousand shares of Cumulus stock...there's another part that completely agrees with Leslie Moonves and can see no real growth in radio,as a business or as an investment.

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It depends on what you consider "real growth." All the stock has to do is go up ten cents and that's a 10% increase in value. That's not a common thing.

I'm not advocating you buy, but just saying that growth for them is different than growth for CBS.

TheBigA said:

It depends on what you consider "real growth." All the stock has to do is go up ten cents and that's a 10% increase in value. That's not a common thing.

I'm not advocating you buy, but just saying that growth for them is different than growth for CBS.

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Good point!
Had I bought those couple thousand shares two days ago I would have seen a two day profit of over 15%.
Have you (Big A) bought any Cumulus shares at the (before the split) price of $0.15/share?
Where do you see Cumulus one year from now?

wavo said:

Have you (Big A) bought any Cumulus shares at the (before the split) price of $0.15/share?
Where do you see Cumulus one year from now?

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No I haven't bought any Cumulus shares. Not my kind of company.

One year from now, it depends on if they're able to carry out the plans they've put in place. If they can close on the land sales, finalize the debt deals, and begin to turn around the revenue situation, particularly in the bigger markets, they'll be in better shape. But I'm really concerned about the lack of a digital strategy, and the lack of investment in areas outside of traditional radio. That's why I'm not buying. Compare it to CBS, which has multiple investments in digital and live events. That's a far more balanced approach.

TheBigA said:

No I haven't bought any Cumulus shares. Not my kind of company.

One year from now, it depends on if they're able to carry out the plans they've put in place. If they can close on the land sales, finalize the debt deals, and begin to turn around the revenue situation, particularly in the bigger markets, they'll be in better shape. But I'm really concerned about the lack of a digital strategy, and the lack of investment in areas outside of traditional radio. That's why I'm not buying. Compare it to CBS, which has multiple investments in digital and live events. That's a far more balanced approach.

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Possibly they are concentrating on the core business, radio, as they should be. You, and others, might argue digital and NTR are core business for radio in 2017.
I remember Lew's Sweetjack idea and what an abortion that effort was. What, in your opinion, should be the digital and NTR direction for radio? I know each station is different but where, generally, should efforts be made in these areas?

wavo said:

What, in your opinion, should be the digital and NTR direction for radio? I know each station is different but where, generally, should efforts be made in these areas?

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Anything is better than nothing, which is what they're doing. I've always been taught to diversify your business and investments, and they're not doing that. But then again, they have no money to invest, so it doesn't matter. That's why Lew is gone. He blew his $2 billion on transmitters and towers. Compare that with what Entercom did. Who made the wiser use of investment money?

TheBigA said:

But I'm really concerned about the lack of a digital strategy, and the lack of investment in areas outside of traditional radio.

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They invested in Rdio, which is now kaput. I had thought that Cumulus was going to turn Rdio into an iHeartRadio competitor once their exclusive streaming deal with iHeartRadio ran out. Speaking of that deal, where Cumulus made iHeartRadio the exclusive streamer of Cumulus stations in exchange for iHeartClearChannel stations promoting SweetJack, was obviously a much better deal for iHeartClearChannel than Cumulus, now that there's not much left of SweetJack (now Sweet Deals).

How much time is left on the Cumulus agreement with iHeartRadio? I'd like for Cumulus stations to also be streamable on TuneIn.

If you want to make money on CMLS in the foreseeable future, I guess you could day-trade it like a penny stock. Caveat emptor.

SweetJack got killed when the Groupon daily-deal/online-coupon ship was swamped by all of the other established media companies invading that space, like Gannett (Value Clipper, Local Flavor, etc.) and Cox (Valpak) that already had a dead tree coupon presence and for which digital was a logical extension. Cumulus could have made SweetJack a contender with a radio+online advertising model, but they didn't bring anything new to the table vs. entrenched incumbents like Gannett/Cox or dangerously desperate digital pure-plays like Groupon.