After dropping plans to go private, Cumulus Media still wants to have less of its stock in public hands. The company’s board of directors has authorized the buyback of up to $75 million worth of Cumulus stock. The badly beaten-up stock rebounded a bit yesterday on the news.
“This new repurchase program once again demonstrates the confidence of the Board of Directors in the future of Cumulus and our belief that, based upon our assessment of the future prospects of Cumulus, our shares are currently undervalued. The Board feels strongly that further repurchases of our shares offers an excellent opportunity to enhance the long-term interests of Cumulus and our shareholders,” said Cumulus Media CEO Lew Dickey.
RBR/TVBR observation: It seems like every broadcasting company – radio, TV or both – has been actively buying back its own stock at what management sees as discount prices. But that has done nothing to support stock prices. In fact, if they had delayed those buybacks, they could generally have gotten more shares for the same money a little later.
We’ve begun to hear some investor objections to buybacks in quarterly conference calls, since they haven’t resulted in any near-term rewards for the patient shareholders who continue to hold stakes in broadcasting companies. Some would prefer to have bigger dividends and at least have some cash to spend while waiting for media stocks to recover.