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Cumulus Stock Price

mrkadison said:
Safe to assume we're done here?

Y'know, when trading opened on Wall Street this morning Cumulus Media's stock opened at five cents a share. Five cents!!
And you know what's really incredible? It actually fell another 10%.
https://finance.yahoo.com/quote/CMLSQ?p=CMLSQ

I'm sure it won't be Mary Berner or Mike McVay or anyone else in the Cumulus brain trust, but whoever's the last one out the door please turn off the lights, m'kay?
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Anyone buying or selling shares today is doing it based what they believe the current shareholders will get as equity in the post-Chapter 11 company. As, in some cases, shareholders get nothing, this is simply a gamble. But if shareholders get $0.10 a share in equity in the new company, they will have made 100% if they sell immediately.

Cumulus is going to emerge from Chapter 11 as a fairly viable company, with reduced debt. The current shareholders will get next to nothing, and the debt holders will likely get some cash and much of the equity in the "new" company.
 
DavidEduardo said:
But if shareholders get $0.10 a share in equity in the new company, they will have made 100% if they sell immediately.
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When you buy stock, you are becoming part-owner of a business. And I would never buy shares in a radio company run by Berner, McVay, etc. Their decision-making has destroyed hundreds of millions of dollars worth of shareholder value. Their track record of capital allocation is abysmal. Nothing in the past few years indicates Cumulus is capable of surviving (never mind THRIVING) in a world increasingly filled with music-streaming options and popular talk podcasts.

But hey, that's just me. :) What about you, Mr. Gleason? Are you buying shares of Cumulus at today's opening price of $0.05?
 
mrkadison said:
When you buy stock, you are becoming part-owner of a business. And I would never buy shares in a radio company run by Berner, McVay, etc. \
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What do you know about McVay's track record? Name all the companies he's run.

I own a lot of stock in a lot of companies, and I can tell you none of the companies see me as a part-owner. They don't consult me on any of their decisions. Owning stock is taking a risk. They tell you that at the outset. Shares can lose value. You want a safe investment? Don't buy stock.
 
mrkadison said:
And I would never buy shares in a radio company run by Berner, McVay, etc. Their decision-making has destroyed hundreds of millions of dollars worth of shareholder value.
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McVay is the programming department head, not administrative management. If you want to analyze Mary Berner's record at Cumulus, you should look at her, the CFO and the BoD together as that is where the longer term strategy has been formulated.

In fact, the plan to file for Chapter 11 is reported to be part of why Berner was brought in. A total reorganization and debt relief are the only way to revitalize Cumulus, and that is what they are doing.

But hey, that's just me. :) What about you, Mr. Gleason? Are you buying shares of Cumulus at today's opening price of $0.05?
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I don't short, do puts and calls or have a margin account. I invest and I don't gamble.

However, if there is a chance that current shareholders will be given a tiny bit of equity in the "new" Cumulus, I can see why the risk taking market players would put some money in Cumulus shares.
 
DavidEduardo said:
I can see why the risk taking market players would put some money in Cumulus shares.
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One of the most interesting bits in the Cumulus bankruptcy was canceling a 20 year old separation contract of a former president. Those are the kinds of things no one seems to look at until they have to. When you buy an old house, you have to look at the foundation. When you buy an old car, you look at the engine. Cumulus & iHeart were buying assets and not looking at the contracts they assumed. After a while, those things add up. You need to find a way to get out of all the bad deals, and one way is to go bankrupt. So now, with a thinner inventory, they'll be in better shape to grow.
 
TheBigA said:
You need to find a way to get out of all the bad deals, and one way is to go bankrupt. So now, with a thinner inventory, they'll be in better shape to grow.
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One big albatross which won't easily go away, is all the almost worthless AM station debt. Even after reorganization, .50 on the dollar for AM stations that they paid too much for to begin with, are going to present a challenge in their new world. There is only so much write-down one can do.
 
Kelly A said:
One big albatross which won't easily go away, is all the almost worthless AM station debt. Even after reorganization, .50 on the dollar for AM stations that they paid too much for to begin with, are going to present a challenge in their new world. There is only so much write-down one can do.
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In a quick look at the Cumulus financials, it appears that they already took an impairment charge to take into account the present value of certain assets.

Most owners with AM stations have done that.

An AM bought in the 1996 to 2006 frenzy years is likely worth $0.20 cents on the dollar today.

Those facts are likely part of what was presented to creditors as part of the Chapter 11 proceedings to show that the assets were worth less than the debt, and the only way to recover some of the money was to renegotiate based on the current reality.
 
DavidEduardo said:
Those facts are likely part of what was presented to creditors as part of the Chapter 11 proceedings to show that the assets were worth less than the debt, and the only way to recover some of the money was to renegotiate based on the current reality.
Click to expand...

My recollection is that Cumulus paid $2 billion for Citadel in 2012, and that company was filled with overpriced AMs from their purchase of ABC Radio. Right now the only AM I see in their group that's delivering is KNBR in San Francisco. The rest are bottom dwellers.

Right now the FCC is looking at adjusting the ownership cap to allow some kind of "discount" for AMs. That is far more justifiable than the UHF Discount they just reinstated.
 
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