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Audacy implements reverse stock split to regain NASDAQ compliance

The Audacy streaming radio app appears on a smartphone. (Photo by Focal Foto, Creative Commons; Graphic by The Desk)
The Audacy streaming radio app appears on a smartphone. (Photo by Focal Foto, Creative Commons; Graphic by The Desk)

Radio broadcaster Audacy has carried out a reverse stock split as it seeks to regain compliance with the NASDAQ stock exchange’s policies.

The move saw Audacy issue one share of company stock for every 30 shares held, which reduced its outstanding shares of Class A stock from 137.5 million to around 4.6 million. A similar reverse split impacted the company’s Class B stock, which reduced outstanding shares from 5 million to around 135,000.

The stock split was approved by Audacy’s shareholders during a meeting on May 24, and the ratio was established earlier this month, officials said in a filing with the U.S. Securities and Exchange Commission on Friday. Audacy said it issued cash payments to cover fractional shares of stock owed after the reverse split.

Audacy was removed from the NASDAQ in May after its stock price traded below the $1 minimum threshold for more than a year. The company’s stock traded for around 6 cents per share at the time it was de-listed.

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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 month, Audacy CEO David Field said the company 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; the company hoped to get at least $2.5 million for the lucrative domain, which was acquired as part of its purchase of CBS Radio. The auction ended with no buyer.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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