Here's an excerpt from the Q3 2009 10-Q (below). If they paid an average of $1.61 a share, and the fundamentals of the company are better than they were a year ago, and they were literally buying back a SHITLOAD of stock (reducing the entire share base by roughly a FULL 50% in about an 18 month period)....is there any reason this stock should be trading at $1.30 right now?? Hmmm.
14. SUBSEQUENT EVENTS:
During October 2009 and through November 9, 2009, the Company repurchased 3,342,101 shares of Class D common stock in the amount of $5,367,466 at an average price of $1.61 per share. As of November 9, 2009, the Company had approximately $43.8 million in capacity available under its share repurchase program given all applicable restrictions as noted in Note 9 - Stockholders' Equity.
Can someone tell me wtf happened back in the May/June timeframe that made this plummet from the $4.00 range to where it is now...or even to sub $1.00? Yeah, I understand if they could not refinance their bonds they would be BK, but it looks like they are going to issue more bonds, no problem. So why the sell off?
I think it is fair to say that buying 30 million shares for $40 million would be a far better use of leverage than spending 110 million for a small percentage of TV One, as they plan to do.
Seems like they are going the wrong way with that deal. If TV One is really worth that much they should sell their ownership for $200+ million, and buy a boatload of stock while also paying down debt, and focusing on the guts of the real company.
That would get us one hell of a pop. But that is not where they are going and lets face it they could not sell their ownership of TV One for anything near what they are about to pay to increase it.
The banker/financial investors in TV ONE are taking advantage of a radio company that wants to be a "media" company at any price.
And if Radio One is buying stock right now, the selling or lack of investor buying interest in this leverage increasing & interest doubling deal must be worse than we thought. Its overwhelming.
Maybe mgmt was behind a market order for 100K shares that bumped the valuation 20% Thursday morning and has been fading away since? It has their signature on it - they do like to overpay...
Don't they have room on their revolver to buy back stock, or not?
It's hard to believe, considering they were so savvy (albeit risky) reducing their share base by HALF in the downturn, that they are being utterly stupid in what they are doing with TV One. But that's, admittedly, a supposition on my part.