Has Townsquare Media turned an important corner for its publicly traded shares?
The company crossed an important threshold on Wall Street today for the first time in months, and could point to a long-term comeback for the local media purveyor, which is likely ready to refocus on AMs and FMs in the wake of poor returns from its events and festivals business.
On lighter-than-average volume of 48,228 shares, TSQ shares finished Wednesday’s trading at $8.04, up 2.7% from Tuesday’s close.
That’s a big deal, as Townsquare was trading at $7 as recently as March 19, and hit a low of $6.65 on February 5.
Townsquare shares sank on Oct. 30 after the company reported its Q3 2017 results. The company’s financial performance was disappointing—and investors were less than kind in selling off TSQ shares.
A steep Nov. 8 drop came as the company’s co-CEOs, Bill Wilson and Dhruv Prasad (pictured) disclosed during a Nov. 7 conference call with analysts that it is putting its outdoor events and festivals segment under strategic review.
“The highlight of Townsquare Media’s third quarter was, without a doubt, the strength of our Local Marketing Solutions segment,” Wilson noted as Townsquare revealed its Q3 earnings results.
Townsquare’s Local Marketing Solutions arm saw net revenue growth of 1.7%, and 3.0% excluding political revenue, Wilson said.
But, its topline results overshadowed that in a big way.
Net revenue dipped to $164.11 million, from $165.76 million.
Net income fell to $14.29 million (51 cents per diluted share), from $15.86 million (58 cents).
“Due to these challenges, we have begun a strategic review of our Entertainment business,” Wilson revealed.
That’s a huge shift in direction for Townsquare, which in August 2016 saw a 12% strategic investment by Madison Square Garden Company, owner of some of the nation’s top entertainment venues and three pro sports teams.
MSG Co. purchased approximately 3.2 million shares of Townsquare from GE Capital in a private transaction, which the Wall Street Journal values at $30 million. On its surface, the transaction appeared to be squarely focused on MSG’s desire to become the key music and live event player in New England and the New York metropolitan area, rather than Townsquare’s radio stations.
The stock stabilization also seems to suggest Wall Street’s support of co-CEOs for Townsquare, following the October 2017 shift of Steven Price to Executive Chairman.