Nasdaq has several rules that a stock must follow in order to remain listed. One of the most important is a minimum stock price of $1 per share. The Cumulus stock had been down around $.30 a share since the Dickey family was booted out and replaced by the woman who rode Reader’s Digest through bankruptcy.
Facing delisting, CMLS shareholders voted for an 8:1 reverse stock split to raise the price up to $2.40 a share by cancelling 7/8 of the existing shares. But in about a week since the reverse split, the stock is back down to $1.05 a share, meaning the stockholder value for the entire company is down to $37 million. When you consider that there are pending deals to sell the WMAL and KABC tower sites for $200 million in cash – that seems odd, until you remember that the company has $2.4 billion in long term debt. The stockholders are just a pimple annoying the real owners – the banks.