Urban One’s Wall Street Bubble Bursts

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Following the social justice protests across the U.S., fueled by the murder by members of the Minneapolis Police Department of George Floyd, several high-profile Chief Marketing Officers — including Procter & Gamble Co.’s Mark Pritchard — pledged to invest in media superserving African American consumers.


Investors responded, as Urban One shares surged from $1.84 on June 12 to $36.30 just one week later. By July 6, however, “UONE” cooled off, and seemed to have reached a “new normal” on Nasdaq.

That’s not the case, however. Urban One stock has lost 62% of its value in the last two weeks.

With early-after hours trading already underway on Monday afternoon, UONE as of 4:31pm Eastern sat at $4.19, up four cents from the official Aug. 24 close of $4.15.

That’s a far cry from where Urban One shares were just two weeks ago, and where UONE sat on August 18, when the company led by Alfred Liggins III filed a prospectus supplement with the SEC outlining an “at-the-market” equity offering program.

The plan outlined by the company founded by Cathy Hughes and led today by her son, Alfred Liggins III, calls for the possible offering and sale of Urban One Class A shares — with an aggregate offering price of “up to” $25 million. This offering would be conducted “from time to time” through the equity offering program.

Net proceeds from the sale of any Class A shares would be used for “general corporate purposes, including repayment of indebtedness.” But, the timing of any sales “will depend on a variety of factors.”

With the announcement, UONE has been in a free-fall, as investors may be unhappy with any forthcoming share dilution.

That said, one must perhaps have the right perspective when reviewing the full growth for Urban One since mid-June. That would be 126% — even with the latest dip in value.