Cumulus Media’s 19% Jump Leads the Billboard Global Music Stock Index
Written by djfrosty on May 12, 2023
Cumulus Media’s share price climbed 11.9% to $3.30 on Friday (May 12) after the company announced it commenced a “modified Dutch auction” tender offer to purchase up to $10 million of shares of its common stock at up to $3.25 per share. That news led to a 19.1% improvement this week and made Cumulus, the third-largest radio company in the U.S. by revenue, the week’s top performer on the Billboard Global Music Index.
Radio companies have suffered from an advertising slowdown since the second half of 2022. Two weeks ago, Cumulus CEO Mary Berner cited “considerable macro-driven weakness in the national advertising market” when the company announced its first-quarter revenue declined 11.4% to $205.7 million and adjusted earnings before interest, taxes, depreciation and amortization fell 66.9% to $10.3 million. To shore up its bottom line and share price, which has fallen 46.9% year to date, Cumulus has cut costs — it also announced an additional $10 million of annualized savings — and retired debt at a discount. The Dutch auction is part of its previously announced $50 million share repurchase program and is “is consistent with its goal of maximizing shareholder value,” the company said in a statement.
The Billboard Global Music Index, a composite of stocks of 21 music companies across the global music industry, declined 2.8% to 1,203.04 last week. Nine of the index’s stocks were in positive territory, 10 stocks declined and one stock was unchanged. Year-to-date, the index has gained 3.0%.
Sphere Entertainment Co. declined 28.9% this week after the company disclosed on Wednesday that construction costs for the state-of-the-art venue in Las Vegas had increased $125 million to $2.3 billion. Sphere blamed the increase on the “overall complexity of the project” and noted it had made “significant progress” towards completing the structure before U2’s inaugural performance on Sept. 29.
The stock market in general performed better than the Billboard Global Music Index. The S&P 500 and Dow Jones Industrial Average declined 0.3% and 1.1%, respectively. The Nasdaq composite index improved 0.4%. In the U.K., the FTSE 100 index dropped 0.3%. Korea’s KOSPI composite index fell 1.0%.