Beasley Broadcast Group shares were pounded for a second consecutive day on Wall Street on Tuesday as investors reacted to a pre-dawn announcement that negated news dispatched 24 hours earlier that was met unfavorably by stockholders.
As of 1:27pm Eastern, Beasley shares were off by a steep 21.4%, to $7.00.
This puts BBGI back at prices not seen since December 2016.
Trading volume was exceptionally high, with 845,488 shares trading hands in midday trading on Nasdaq. Average volume for Beasley is 11,800.
Tuesday’s swoon for Beasley shares was precipitated by a pre-Opening Bell announcement from Beasley that it withdrew its plans to offer any shares.
This was noteworthy, as Beasley on Monday announced a proposed offering of shares of its Class A common stock that specifically spelled out the plan of action: The proposed offering included 1,305,000 shares offered by Beasley, and 3,126,147 shares offered by selling stockholders, or “certain stockholders of Beasley” named in the preliminary prospectus supplement filed in late June with the SEC.
Additionally, the underwriters had a 30-day option to purchase up to an additional 663,922 shares of Class A common stock from Beasley and the selling stockholders.
Now, just the 3.13 million or so shares from selling stockholders are being priced and offered. In addition, the underwriters are being given the 30-day option to purchase only up to an additional 468,922 shares of Class A common stock from those “certain stockholders.”
That would be the Bordes family, the owners of the now-defunct Greater Media.
Pricing of the 3,126,147 shares of their Class A common stock is set at $7.50 per share.
For a few minutes in the first 60 minutes of trading, Beasley was at or near that price. Then, a steady decline began.
As this share sale is being conducted by the Bordes family, Beasley is not receiving any proceeds.
Why did Beasley do an about-face on the share offering just 24 hours after presenting its proposal to the public? A company spokesperson tells RBR+TVBR that Beasley’s intent from the start was to “tag on” to Bordes’ share sale, noting that it was Beasley’s option based on whether or not enough demand existed for their offering.
Based on the $7.50 pricing of Bordes’ shares, Beasley opted out of selling their 1.3 million shares.
The sale of the Bordes family’s shares was hardly unexpected. Thanks to Beasley’s $240 million accretive acquisition of Greater Media, which closed on Nov. 1, 2016, the Bordes family was issued BBGI stock as part of the financial consideration.
Greater Media was a privately held broadcast media company led by the Bordes family. The deal was finalized in July 2016, following a series of conversations that began with then-Interim CEO and CFO Caroline Beasley calling former Greater Media Chairman/CEO Peter Smyth asking if the Bordes family would be interested in a deal.
Asked for comment about the steep drop in Beasley’s stock price since Friday’s market close, the Beasley spokesperson noted that “price activity is not unusual in secondary public offerings.”
Why did the Bordes family sell their shares now? While the Beasley spokesperson deferred most questions to the family, they did note that the sale of their shares enables Beasley to get more liquidity in the market.