On a day that saw Cumulus Media enjoy a much-need gain, the radio industry needed a positive story to share with investors. Spanish Broadcasting System (SBS) couldn’t oblige, as its stock not controlled by Raúl Alarcón Jr. sank 10.1%, to 62 cents, in Tuesday’s trading.
It’s a steep drop from July 26, when SBSAA shares were at $1.57.
The sell-off is likely tied to a report in The Wall Street Journal noting that the company is “being pressed for payment by investment funds that claim to be owed more than $161 million.” In particular, 11 funds say SBS is culpable of contract and corporate duty breaches. The suit would also prevent SBS from taking on additional debt.
Additionally, SBS has reached a deal to sell its broadcast facility in New York for $14 million — another cash-raising measure necessitated to deal with the repayment of some of its 12.5% senior secured notes due 2017.
SALEM SLUMPS IN Q3
Salem Media Group on Tuesday afternoon joined the group of broadcast media companies that did not have a good Q3. The religious and conservative talk-focused radio station owner saw its Q3 net revenue slip to $65.43 million, from $71.27 million. While broadcast operating expenses slipped to $37.04 million, from $37.43 million, Salem swung to a net loss of $46,000 (0 cents per diluted share), from net income of $2.2 million (8 cents) in Q3 2016.
For Q4, Salem is projecting total revenue to decline between 4% to 6% year-over-year, moving to $70.7 million.
Ahead of the release of its Q3 results, Salem shares were down 2.1%, to $5.85.
In today’s other activity on Wall Street:
- Veritone Inc. shares were down by a steep 21.2%, as the AI tech company saw its net revenue surge to $3.43 million, from $1.87 million. Unfortunately, its net loss to attributable shareholders widened to $19.37 million, from $8.2 million. Veritone per-share loss moved to $1.31, from $3.49, but reflects its Initial Public Offering seen earlier this year. VERI – $28.90 – down $7.77
- Beasley Broadcast Group saw its stock dip 2.6%, to $9.50.
- Cumulus Media rebounded by 14%, to 33 cents.
- Entravision shares surged 6.6%, to $5.65.
- Saga Communications dipped 6%, on a somewhat disappointing Q3 earnings report issued early Tuesday. The closing price: $42.45.
- Townsquare Media was off 9.8%, to $9.15, after the company noted that it would begin a strategic review of its event business, suggesting that it would now focus on its radio stations.
- Pandora shares slid to $4.93, falling another 6.6%, as investors continue to express displeasure at the streaming audio company. While subscription and advertising revenue improved in Q3, the company’s royalty payments are far greater than its dollar intake.