Cumulus launches rights plan

http://www.bizjournals.com/atlanta/news/2017/06/05/cumulus-media-adopts-anti-takeover-defense.html

The market capitalization of Cumulus Media (NASDAQ: CMLS) is down to a mere $14 million, carrying debt of around $2.4 billion. The board just executed a preferred rights agreement intended to block a takeover attempt if any owner or group of owners with 5% of the stock tries to oust the current board.

The logical inference (based on no specific evidence) is that Lew Dickey’s $150 million blank check pool of money will be used to take back control of the company. This power struggle looks like a lose-lose deal no matter what.

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6 Responses to Cumulus launches rights plan

  1. TheChairman says:

    A Pennystock for their thoughts.

  2. briand75 says:

    The things they don’t teach you as an undergraduate student. Board maneuvering and shenanigans to avoid large investors from taking over your board and company.

    I think with $14 million market cap they are okay for a time. The TTM revenue is running about $1.2 billion, which is respectable and the Assets run about $2.4 billion. Unfortunately, the book value is -$2.2 billion due to the presence of that large debt and the effect is seen in the earnings at $1.8 million (out of proportion).

    The bottom line – if you are investor, you had best not be too risk averse as you won’t invest a penny in Cumulus. The attraction has to be the market share that they represent.

  3. briand75 says:

    I ran analytics on Cumulus and the result was a sea of red indicating that the longevity of Cumulus is very much in question.

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