Is the largest radio conglomerate in the US about to go bankrupt? Now, iHeartMedia is hitting extremely hard financial times — and warning investors of a possible collapse in less than one year.
Quarterly losses of $248 million. A stock price plunging towards 50-cents. Major Wall Street delisting fears. Debt levels in billions.
Welcome to the real state of traditional broadcast radio in America.
Exhibit A: iHeartmedia, Inc., which is now warning investors of a financial iceberg ahead. During a dour investor meeting last week, the company flatly pointed to a possible meltdown — in just one year.
“There is substantial doubt as to the company’s ability to continue as a going concern for a period of 12 months following November 8, 2017,” the company forecast.
In other words: iHeartmedia may close its doors before November 8, 2018.
iHeartmedia, Inc. is the largest traditional radio conglomerate in the United States, with over 850 AM and FM stations under its umbrella.
Sounds impressive. But that collection was achieved through massive financial leveraging and speculative loans. All of which is now precipitating a possible default.
Accordingly, the company’s debt schedule is positively horrifying.
In SEC paperwork filed last week, the company warned of “the impact of our substantial indebtedness, including the effect of our leverage on our financial position and earnings.” If also questioned its “ability to generate sufficient cash from operations and liquidity-generating transactions,” while also pointing a serious inability to reinvest and grow.
In the filing, iHeartmedia also pointed to a “need to allocate significant amounts of our cash to make payments on our indebtedness, which in turn could reduce our financial flexibility and ability to fund other activities.”
Wall Street subsequently reacted by driving shares towards 50-cents.
The plunge featured a 47% free-fall before things stabilized. Currently, shares are currently trading at 86-cents ahead of the Monday bell. All of which is raising fears of a delisting ahead, given the stock’s sub-$1 share price.
Accordingly, the company now appears to be entering survival mode, while working frantically against a near-impossible debt calendar.
According to the company, here’s the ‘debt maturity’ calendar:
September 2017: $366.9 million
2018: $308.5 million
2019: $8.368 billion