Would you buy stock in a “new” iHeartRadio?

Part of winding down the Chapter 11 bankruptcy of Clear Channel / iHeart is that iHeart is going to have an IPO. By creating a liquid market in their common stock, debt holders who accepted the debt-for-equity swap can exit their positions and write off their losses, if they so choose.

Inside Radio

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9 Responses to Would you buy stock in a “new” iHeartRadio?

    • Fred Stiening says:

      That Jerry guy who teaches out in California was ragging on Entercom yesterday, but you have to pay to read his newsletter. Speculating that Entercom would mishandle the CBS Radio merger was pretty easy. The only radio stock I own is a small quantity is Saga, which is highly illiquid and wasn’t a good investment. Buying Norfolk Southern just after the Canadian offer was rejected in January 2016 was my best decision. Up 152% in a little over three years…

      • CC1s121LrBGT says:

        Forcing the Entercom stations into the CBS Radio app and removing them from the more popular apps seems like a loser strategy to me.

        I was in a waiting room today and from the table, picked up a hard copy of a newspaper as reading material while I waited. I had already read everything of interest on my cell phone, but realized I had not held a physical newspaper in my hands in many years. I was shocked that the paper was not was wide as it was, fewer columns and inches across the pages… and how thin it was, very little to read.

        Newpapers had trouble adjusting to the fact that I can read the same story at hundreds of newspaper websites and that they were competing with others outside their traditional geography. That is equally true with radio. I like to listen to talk radio but virtually never listen to the local WABC because it has a pre-roll advertisement.

  1. CC1s121LrBGT says:

    “A prominent advocate for the AM band is petitioning the FCC to allow stations to use all-digital transmissions in the United States.”

    https://www.radioworld.com/news-and-business/business-and-law/bryan-broadcasting-asks-fcc-to-allow-all-digital-am

    It would be helpful but does not solve the interference problem of too many stations on the band where signals travel thousands of miles at night.

    • Fred Stiening says:

      Do all digital AM stations bounce off the troposphere? I don’t know.

      • CC1s121LrBGT says:

        They don’t. They do bounce off the ionosphere. It is a function of their frequency (540 – 1750 kHz) not whether they are AM, FM or digital.

        Tropospheric propagation is higher frequencies, starting as low as 40 MHz per Wikipedia.

        Both were great features in the early days of radio when there were few stations, no satellites and no internet. Today, the move is toward higher frequencies that are more line-of-sight and transmitted with a grid of smaller local towers (think cell phones).

  2. Fred Stiening says:

    Iheart cuts local news staff – might it be to temporarily increase operating income prior to an IPO?

    https://www.allaccess.com/net-news/archive/story/185455/staff-cuts-hit-iheartmedia-news-departments

    I remember when Clear Channel used to promote the importance of local radio

    The paperwork is at the FCC to pull licenses back from debtor in possession status.

  3. Fred Stiening says:

    So IHRT is now on sale. NASDAQ allowed them to register for direct trading, rather than launching an IPO. This means the sellers at the moment are the lender who received the stock as part of the bankruptcy process and want out. The total value of all the stock is a little less than 1 billion dollars. The bankruptcy took about 15 billion dollars in debt off the books and the Clear Channel outdoor portion of the company that operates billboards was split off to a separate company.

    IHRT still has 5 billion dollars in debt, so the debt holders effectively still control three fourths of the company and will insist that their interest payments be made before any dividend is given to the stockholders. This will continue until the next bankruptcy.

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