I am a bit new to the radio industry, and I am trying to figure out the pricing of stations\frequencies\licenses.
Considering that Emmis previously said that assets (stations) sold will not effect revenue (I think that longtimefollower said it at a certain point).
Why would someone pay $100 M for a radio frequency in New York? Is it because all other FM frequencies are already used?
Article quote that sums it up:
“The stockholders continue to think they’re owed more because Emmis has this beachfront property,” Foster said. “But what the stockholders have missed is the same thing that Smulyan himself was slow to recognize. The industry has changed, and those stations aren’t worth what they used to be.
In May 1997 Emmis reached an unusual deal with
Tribune Co. to swap that company's New York FM station, WQCD, for two television stations which Emmis purchased at Tribune's behest. The arrangement, which cost Emmis $140 million, allowed Tribune to avoid paying capital gains taxes. The acquisition of jazz-formatted WQCD made Emmis the third largest operator in the New York radio market. Also in the spring, Emmis bought two more Indianapolis stations, WTLC-FM and AM, from Panache Broadcasting of Philadelphia for $15 million.
Let me see if I have this straight. Emmis founder and CEO Jeffrey Smulyan, who has been in the industry for over 30 years and is intimately familiar with the company, attempted to take the company private for $2.40 early last year, after attempting to take it private four years ago for $15.25. A number of large shareholders launched a class-action suit against Smulyan last summer , claiming that $2.40 was too LOW. The hedge fund backing the deal got spooked when the entire market tanked in August.
Based on some of the assertions that I've seen here recently, apparently Mr. Smulyan knows absolutely nothing about the value of the company. So the question really boils down to this: do I put my money on someone who founded the company over 30 years ago, or listen to some day-traders who have admittedly purchased the stock for a quick ten cents or two, one who claimed that "Emmis will never come back" when the stock price was around fifty cents in December. Hmmm, tough decision.
Been trying to find out about similar NY Radio Stations sales, found one from 2009, where NYT sold WQXR for $45 M.
I know that you probably wont believe this, but I have not lost any money on EMMS. I did buy some when the votes, and lack thereof were happening, and made some $$$. Then bought again when it got really low and bailed way too early, barely covered the cost of the trade. I will buy again, and sell again, and so on. Better to tell it like it is and make money off the VOLATILITY than to buy and blindly hold the stock of a company with the profile of EMMS. The facts speak for themselves, and the market votes on EMMS every trading day. I dont short, can't in IRA. If EMMS is such a great story and the market begins to believe again, I will make money buying with more conviction as it goes up. Happy Trading.
The fact that you lost a boatload of money has nothing to do with the fundamental value of the company, and more importantly, the big city stations it is trying to sell off, now.
The CMLS/CMP Partners deal, Bonneville deal, and now CMLS's attempt to buy Citadel, creates a sense of "desirability" of radio assets. This is good news for EMMS....and very timely.
This is a $2-4 stock within 12 months.
Abb, when you make comments like "How are your 76 cent shares treating you?... Just be prepared, EMMS is not coming back", your track-record of predicting Emmis stock pricing is not very encouraging, and seems more like "bashing" to me.