Cumulus Shares Slide On Word Of Delisting Appeal


By all accounts, Cumulus Media — the nation’s No. 2 radio broadcasting company by number of stations — enjoyed a strong Q2.

While revenue improved by 10%, Cumulus’ earnings soared by 177% compared to Q2 2017 — a sign that turnaround strategies implemented by Cumulus President/CEO Mary G. Berner are working.

Yet, as the No. 2 radio broadcasting company by number of AM and FM stations is experiencing upward momentum, investors are growing increasingly frustrated over Cumulus’ towering debt.

CMLS shares last traded above $1 in mid-February. In fact, February was a particularly difficult month for Cumulus stock, which plummeted to 60 cents by Feb. 27. March wasn’t any kinder, with CMLS shares finishing Q1 at just 32 cents.

After falling to 23 cents a share on April 27, a rally of sorts was seen thanks to growing positives, including word of a rejuvenated KLOS-FM 95.5 in Los Angeles and growth at its array of Talk stations formerly owned by ABC Radio.

That mini-rally sputtered on May 29, when Cumulus topped off at 53 cents per share.

It hasn’t come close to that value since, and as of 11:25am Eastern on Monday (10/9), CMLS shares were right where they were at the end of Q1 — 32 cents. They quickly rebounded to 33 cents.

With a market cap of just $9.38 million and a one-year consensus target estimate of 63 cents, Cumulus is having difficulty escaping the fiscal challenges created by a team that predates Ms. Berner.

With The Wall Street Journal reporting Sept. 29 that Cumulus Media “recently started talks with two separate groups of creditors who own big chunks of the company’s $2.4 billion in debt,” citing “people familiar with the matter,” the company entered October with a big cloud over its stock.

Now, it’s putting up a bit of a fight, in the form of an appeal hearing request for its expected receipt on Tuesday (10/3) of a delisting notice from Nasdaq.

With 180 days to regain compliance for failing to see its shares close no less than $1 for 30 consecutive business days, Cumulus has two routes to proceed on. In one scenario, it can shift its shares to a lesser stock exchange, following the lead of Spanish Broadcasting System (SBS) and perhaps that of iHeartMedia, which trades on OTC Pink, considered by Wall Street as one of the leading forums for the riskiest stocks. The other scenario is a successful appeal.

Cumulus opted to appeal, the company disclosed late Friday in a Securities and Exchange filing.

At this appeal hearing, a Nasdaq hearings panel will consider “this additional matter relating to the minimum bid price requirement in rendering a determination regarding the company’s continued listing on Nasdaq.”

This may do nothing more than bide time for Cumulus, which is likely preparing for a shift to the OTC Markets, an electronic quotation service operated by OTC Markets Group Inc. for eligible securities traded over-the-counter. This shift would be as close to immediate, following the hearing’s outcome, as possible.

It should also be noted that this appeal will be combined with an earlier Nasdaq appeal, which was seen Sept. 11. This appeal is tied to perhaps something even graver for Cumulus than its sub-$1 stock value: the company has failed to comply with the exchange’s minimum stockholders’ equity requirement.

Had the appeal not be filed, CMLS shares would have been suspended on Sept. 11 and removed from Nasdaq, with an immediate delisting and Sept. 12 shift to the OTC.


One Wild Card option may exist for Cumulus: A second reverse stock split, allowing the company to stay on Nasdaq. However, the equity requirement is a likely preventive issue for Cumulus with this possible remedy.

Nearly one year ago, on Wednesday, Oct. 12, 2016,  Cumulus set a special shareholders meeting at which a vote on the company’s proposed 1-for-8 reverse stock split would be either approved or rejected. It was approved.

RBR+TVBR reported of this shareholders meeting on Sept. 19, 2016, when Cumulus shares were valued at 36 cents.

Had the reverse stock split not transpired, Cumulus shares today would be valued at $0.00413.