iHeartMedia Prevails In Texas Court Against Bondholders
Stock Price Jumps After the News
May 24, 2016 at 1:47 PM (PT)
iHEARTMEDIA has won its case in the State District Court in BEXAR COUNTY, TEXAS. The verdict from state District JUDGE CATHLEEN STRYKER blocks bondholders that took iHEARTMEDIA to court over a recent transfer of assets within the company, from filing default notices against the company in connection with the transfer.
iHEARTMEDIA stock jumped dramatically once the news hit, at one time peaking at $1.20 from around 95 cents a share. It has since settled down to $1.10, which is still a 43% bump for the day.
THE SAN ANTONIO EXPRESS-NEWS reports, "The legal dispute involved a DEC. 3, 2015 transfer of 100 million shares of iHEARTMEDIA’s billboard subsidiary CLEAR CHANNEL OUTDOOR HOLDINGS INC. to another subsidiary for the purpose of issuing new debt to buy back expiring debt. iHEARTMEDIA had $20.75 billion in debt as of MARCH 31st. The DEC. 3rd share transfer upset existing bondholders because, they said, the action moved collateral for their bonds out of their control."
iHEARTMEDIA released a statement saying the court, "ruled in our favor when it determined that our contribution of CLEAR CHANNEL OUTDOOR HOLDINGS, INC. stock to our subsidiary BROADER MEDIA, LLC was a permitted investment under our financing agreements. The strong performance of our operating business provides us with the flexibility to manage our capital structure in a prudent manner. In full compliance with our financing agreements, we will continue to evaluate opportunities to strengthen our balance sheet. We look forward to constructive discussions with our lenders as we continue to position iHEARTMEDIA for long-term growth."
Good Day On Wall Street For Radio ... Ripple Effect?
iHEARTMEDIA wasn't the only radio stock to have a good day. Although none of the other radio stocks enjoyed such a dramatic bounce, they all gained ground. Whether that's directly attributable to the court decision is hard to say, since the DOW itself was up over 213 points.
BEASLEY BROADCASTING 4.85 +0.17 3.63%
CBS CORPORATION 53.37 +0.93 1.77%
CUMULUS MEDIA INC 0.34 +0.013 3.91%
EMMIS COMMUNICATIONS 0.56 +0.02 3.70%
ENTERCOM 12.20 +0.58 4.99%
RADIO ONE, INC. 2.33 +0.03 1.30%
SAGA COMMUNICATIONS 42.81 +0.71 1.67%
SALEM MEDIA GROUP 6.74 +0.26 4.01%
SBS 3.58 +0.06 1.70%
Check out all the radio stocks on ALL ACCESS stock index.