About 80 million new Cumulus Media shares were created when the company acquired Citadel Broadcasting on September 16th. As you would expect, trading volume of Cumulus stock jumped dramatically, but is now leveling off.
Daily volume had increased to more than one million shares just ahead of the closing and then jumped to more than two million for the first three days of Nasdaq trading post-closing. After that it cooled down to mostly being under one million shares. With a much larger public float, no doubt daily trading will continue to be well above the level of less than a quarter million that was common before the big merger deal was announced
Cumulus has also registered an additional 29 million shares for new investors Crestview Partners, Macquarie Capital and UBS Securities, although that doesn’t mean they have an intention of selling any shares anytime soon.
RBR-TVBR observation: We didn’t see 80 million Cumulus shares suddenly dumped onto the market because the former owners of Citadel were mostly sophisticated vulture funds. Trading volume for Cumulus had been heavy since the February announcement by Citadel of the pending deal. The vulture funds could well have pre-sold their shares in hedged deals and locked in their profits long before the merger actually closed.