Radio broadcaster Audacy has been removed from the New York Stock Exchange (NYSE) after its valuation continued to trade far below the NYSE’s threshold for listing.
The removal from the NYSE was confirmed in a company-wide memo sent by Audacy CEO David Field on Tuesday, which said Audacy will appeal the NYSE’s decision to remove its stock from trading on the exchange.
Field said Audacy will remain listed by the NYSE while the appeal is ongoing, but shares won’t trade on the exchange. Instead, investors will be able to acquire Audacy stock over the counter. Field said the appeal could be heard as soon as this summer.
“We are hopeful we will find our way back to the exchange later this year as we execute our action plans which include the reverse stock split, the continued execution of our liability management plans and working with our financial advisors to refinance our debt,” Field wrote in the memo. “If the appeal is ultimately unsuccessful, we may move our stock to another exchange or trading platform.”
The NYSE typically requires a company to have a stock valuation of at least $1 per share in order to trade on the exchange. Companies that fall below that threshold can be removed from the exchange, but the process isn’t automatic.
In Audacy’s case, the company’s stock has traded below the $1 price point since last July, according to an examination of financial data by The Desk. On Tuesday, the broadcaster’s common stock was trading around 9 cents per share, making it one of the lowest-valued media companies on the public exchange.
“While this news is disappointing, it has zero impact on Audacy’s ability to serve listeners and customers or run our operations effectively,” Field affirmed. “To be clear, we are business as usual.”
Audacy was formed through the combination of Entercom and CBS Radio in 2017. Over the last few years, Audacy has struggled with its peer radio broadcasters to address a consumer shift away from traditional AM and FM radio toward more-ubiquitous streaming audio options like Spotify, Apple Music and Pandora.
Like some of its competitors, Audacy has pushed harder into on-demand streaming audio through the launch of podcasts and similar products. But the digital products have not generated enough revenue to cover the losses from its broadcast properties: Earlier this month, Audacy attributed just $56.9 million of its net revenue to digital during the first three months of the year, while logging an 8.9 percent decline in local and national spot advertising income during the same period. Overall, Audacy logged a net loss of $35.9 million, an increase of 226 percent compared to the first quarter of last year.
On a conference call with investors last week, Field said Audacy had the misfortune of launching digital products around the time of the start of the global health pandemic brought on by a novel coronavirus three years ago. While other companies have rebounded from the pandemic’s effects, Audacy is still feeling the pain, Field affirmed, exacerbated in part by other macroeconomic effects like fears of a looming national recession.
“It is unfortunate, but of course, the unanticipated reality that we have pursued our transformative work in the midst of a global pandemic, sustained supply chain disruption and an extended ad recession,” Field said. “This has obviously placed stress on the company’s finances, exacerbated by the business’ high degree of operating leverage.”
Audacy has made several reactionary moves to curb its potential loss: In March, the company reached a deal to sell six of its broadcast transmission towers and their associated property to a tower management company for $17 million. Later that month, Audacy extended an online auction for its Radio.com that was launched late last year; Audacy is hoping to get at least $2.5 million for the lucrative domain, which was acquired as part of its purchase of CBS Radio. The auction is slated to end in June.