On New Year’s Day 2018, Beasley Broadcast Group shares were riding high at just under $14 — record territory for the company that had grown with the addition of Greater Media stations in key markets including Boston and Detroit.
Beasley’s stock was largely above the $10 mark for 6 1/2 months. Then came a steep dip that sent BBGI tumbling into the $6 range — halving the company’s share value.
As Q3 came to a close, a trickle of upward momentum seen around Labor Day couldn’t give Beasley the boost it needed to overcome a stock slide that Greater Media’s key ownership may be largely responsible for.
July 24, 2018 could be remembered for a long time as a pivotal day in the history of Beasley Broadcast Group, with respect to its publicly traded stock.
A steep slide in the company’s share value entered its second straight day, as investors turned their anger into share sales over the announcement that the Bordes family would be selling 3,126,147 shares of their Class A common stock at $7.50 per share.
That price was far lower than where Beasley shares sat on Friday, July 20. Today, it’s nearly $1 a share higher than where BBGI currently trades. As of 3:37pm Eastern on Monday (10/8), Beasley was at $6.65 per share.
Beasley CEO Caroline Beasley discussed the stock sale during her company’s Q2 2018 earnings call for investors, debt holders and financial analysts.
Speaking with emotion in her voice, Ms. Beasley explained, “Neither the company or any Beasley insider including Peter Bordes Jr. sold any shares in the offering.”
She did not address Beasley’s attempt to “tag on” to the Bordes family share sale. On July 23, Beasley announced a proposed offering of shares of its Class A common stock — and placed this news ahead of the Bordes’ share sale in its announcement. The proposed offering included 1,305,000 shares offered by Beasley, in addition to the 3.13 million shares offered by selling stockholders, or “certain stockholders of Beasley.”
It wasn’t widely known until the next day that these “certain stockholders” were Bordes family members, as Beasley simply referred to those “named in the preliminary prospectus supplement” it submitted with the SEC.
Additionally, the original plan allowed underwriters to have a 30-day option to purchase up to an additional 663,922 shares of Class A common stock from Beasley “and the selling stockholders” — again, the Bordes family.
This original plan sparked a selling frenzy. Then, on July 24, Beasley reversed course: it withdrew its plans to offer any shares.
Why did Beasley do an about-face on the share offering just 24 hours after presenting its proposal to the public? A company spokesperson told RBR+TVBR on July 24 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.
Asked for comment about the steep drop in Beasley’s stock price on July 24, the Beasley spokesperson noted that “price activity is not unusual in secondary public offerings.”
Today, Beasley holds a 1-year target estimate of $8.50.
Beasley shares in Q3 reached a high of $7.80, on Sept. 4. This concluded a rally from $6.25 that began in mid-August — a sign that Beasley could possibly be on the right track after dipping for a second time (the first being on Aug. 1) to its lowest closing price since December 2016.
By Sept. 7 Beasley was on the downswing, however, slipping to $6.55 by Sept. 21.
As Q3 drew to a close, BBGI sat at $6.90.
Will Beasley’s Q3 results, expected to arrive within the next month, push BBGI forward toward that year-end $8.50 target?
Recent growth announcements have not sparked investors, including the Oct. 2 launch of Beasley XP, an eSports initiative.
Meanwhile, the Philadelphia Flyers NHL franchise is sticking with Beasley, renewing a rights agreement that keeps all play-by-play on WPEN-FM 97.5 “The Fanatic” in the market.