Business
Atlanta’s Cumulus hopes to boost stock price to avoid Nasdaq’s boot
Atlanta radio operator Cumulus Media hopes to boost its stock price with a so-called “reverse split” after Nasdaq warned the company that its shares may be de-listed from the stock market.
The company, which has 452 stations in 90 markets, has been struggling to keep its debt-fueled empire together as radio stations have been bleeding ad revenues and losing listeners to online music streaming services.
Cumulus’ shares have declined about 95 percent since early 2014, to 35 cents a share on Monday.
Last November, Nasdaq warned Cumulus that its stock would be de-listed, or no longer listed as a regularly traded security on its stock exchange, unless its share price stays above $1. Cumulus hasn’t been able to meet that requirement.
The company disclosed in a filing last week that is plans to ask shareholders to approve a reverse split that would convert each eight shares of its stock into one new share.
The move is aimed at raising the company’s share price, but theoretically wouldn’t change the value of investors’ holdings or the market value of the company. After the conversion, investors would own fewer shares with a higher price.
Cumulus said in the filing that the loss of its stock listing could “materially adversely affect the liquidity and market price” of its shares.
Last month, Cumulus reported net income of $1 million for the second quarter, down 91 percent from a year ago. The company lost $13.4 million in the first half of the year, compared to a $0.3 million profit in the first half of 2015.
