Stock traders gave a thumbs-up to the deal announced Monday evening (1/31) by Cumulus Media to buy out its partners in Cumulus Media Partners (CMP) in an all-stock transaction. Cumulus Media will issue a lot of new stock, but add 32 radio stations in larger markets.
Cumulus had closed at $3.82 on Monday before the deal was announced. The stock opened Tuesday morning at $3.84, but quickly shot higher in heavy trading. Cumulus hit a high of $5.00 in afternoon trading and closed with an 18% gain for the day at $4.51
Hindsight is 20/20, but speculators who bought Cumulus shares for 62 cents each as recently as July 2009 have to be feeling pretty good. The low of recent years was 45 cents in November 2008.
RBR-TVBR observation: As the stock price for Cumulus Media went through wild gyrations in recent years – along with many other broadcasting stocks – the Dickey family never lost faith in the long-term value of radio. Family patriarch Lew Dickey Sr., in particular, bought lots of shares when they were trading for a buck and change – or even below a buck. His personal holdings in Cumulus are fast approaching $30 million in value.