Emmis gets a thumbs-up from one of its biggest private shareholders. Emmis Communications’ deal with Sam Zell to borrow up to $35 million to buy out preferred shareholders is welcome news to one of the company’s biggest private stock owners, and sometime critic. "I’m delighted, and excited, to see this financing made available to Emmis," says Tim Stabosz, who owns 3% of Emmis’ common stock. He thinks the company is now "tantalizingly close to being ‘out of the woods’." Stabosz may have been critical of some of Emmis’ moves in the past but says the recent sale of three FMs to Merlin Media and a pending $110 million sale of KXOS, Los Angeles to Grupo Radio Centro combined with the Zell arrangement have brought Emmis well beyond seeing light at the end of the tunnel. "What’s exciting is that the financial flexibility Emmis is achieving will allow it to return to a growth posture, or otherwise take advantage of a myriad of opportunities in the marketplace, rather than being stuck trying to manage a top-heavy balance sheet," Stabosz says. It’s a big difference from a year ago when he filed a class action lawsuit to the proposed $2.40 a share go-private deal. Stabosz now says he’s also open to selling at that price or higher. "Times have changed, and with a premiere company like Entercom trading at little over $5 a share, radio stocks are currently in the doldrums. While I have no notion of Mr. Smulyan’s intentions, as a 3% holder, I’d be more than happy to support a buyout, in the near term, if it would allow for my redeployment of capital into other undervalued radio stocks," Stabosz says. Based on the financial moves the company has taken in recent months, he predicts Smulyan would have better odds at taking the company private.
Just the opposite, actually. The EMMS preferred deal suggests that there will be no " lock up group" to stop the CEO from getting a transaction through, if he wants to.
I personally believe, with the stock at 89 cents (still drastically depressed), and the financial picture for EMMS rapidly improving, if we stay down here, the natural incentive would be for him to seriously reconsider making another going private bid. the reason being, I would suspect, in his own mind, he would see these assets as worth the same or more to him, than they were 1 1/2 years ago, when he made his bid...even if the Street is valuing radio assets at dramatically less.
No offense but I was not happy about $2.40 last time and bought into this stock for the long haul. Not all common shareholders accumulated at a low price like you have. Personally I think your postings about your support and suggested price are way over the top and are tantamount to reverse insider trading and are at a minumum immoral. I hope that he doesn't offer up a buyout for the sake of real longtime followers who have a much higher stake than $2.40 per share.
It's not " immoral" for a major holder, or any holder, for that matter, to voice their opinion, and/or advocate for what they want to see happen with "their" company. I certainly hear, loud and clear, that you resent me, and you have every right to. But being in the stock market is about making money. It's not about engaging in would-have-beens and could-have-beens.
I'm not sure exactly what you think Emmis is worth, or could be worth, but I do know one thing, and it's very simple: if given the opportunity, I'd rather get the chance to swap EMMS out at 2.40 or higher, in the relative near term, for the chance to buy ETM at $5. But I'm guessing you are not sophisticated to understand the concept of relative value.
Finally, while I don't necessarily believe my comments in Inside Radio were market moving (based on today's relatively light volume), they certainly could be, or could have been, so, I have appropriately adhered to standard of not buying or selling any EMMS stock, for 2 full trading days after the release of that info.
Perhaps you can explain to me what "reverse" insider trading is. I simply bought a bunch of stock, because I thought the Street was missing the story, and then explained how and why they are, in my opinion, missing the story. I also should point out that my support for a revisiting of a buyout offer is conditioned upon a normal oversight process by a Special Committee, including the obtaining of a fairness opinion.
I suspect your main objection is that you are living in a dreamland, bought this stock at $10, and don't want to accept the fact that any reasonable notion of obtaining "fair value" means you have to face the fact that you will be subject to taking a significant loss.
I'd love to know what kind of buyout price would be "fair" in your mind. The fact of the matter is, the public market values of radio stocks are instructive in some regard. And they are now dramatically lower, overall, from when the CEO previously offered 2.40 for EMMS. That certainly will play some role in what he would be willing to offer (assuming he has any interest whatsoever in making another run at the company....he may not). And as someone who previously objected to that price, I thought the public, and the company, should both be informed that I have changed my position...based upon the changed circumstances. I make absolutely no apologies for that.
You could have waited for me to post it. And you could have credited Inside Radio with the story.
I own 3% of the company. I can't speak for anyone else, obviously. Some may feel that a financially stronger EMMS, with elimination of a slug of preferred stock, at roughly 25 cents on the dollar of "claim" (along with other recent moves), justifies the common's being worth more than $2.40. I just simply wanted to go on the record, as a material holder, and as someone who was part of a class action to stop the deal at $2.40, last year, to say that I would now SUPPORT it, if it comes relatively promptly. Why? Because, when EMMS announced the original deal to go private at $2.40, 1 1/2 years ago, ETM was at $15 (now it's $5), CMLS was at $5 (now it's $3), and ROIAK was at $5 (now it's $1.35). So, as I stated in the article, the market has changed, adversely, in terms of how it values radio stocks. And yet, with the financial moves EMMS is making, I believe the CEO would be in more of a position than ever, upon those moves being completed (especially with regard to the preferred stock), to reapproach a going private transaction, and have it succeed. I'd like to see that happen...simply because I'd love to be able to make my money, move on, and redeploy the capital in, say, ETM at $5, and ride that one back up to $8-10 (probably), over the next year.
If not, I see EMMS as a $2-4 stock, anyway, in 1 to 2 years. But I'd much rather take a bird in the hand, at $2.40 or higher, in the near future.