Is there finally a silver lining in the dark clouds that have hovered over radio operator Cumulus Media ( CMLS) for the past year or so?
| Bouncing |
Cumulus' rise this week.
Averting DisasterJames Boyle, radio analyst at First Union Securities who issued a blistering report on the company in August after it fell well short of analysts' earnings estimates, is no more sanguine now. "The announcement means they averted disaster," says Boyle. Wall Street's reaction "was not a celebration, but a sigh of relief." That's because the company had put down an unusually hefty down payment to buy the stations -- reportedly some $80 million, or nearly a third of the deal's worth. A more typical down payment for the industry, Boyle says, would be 5%, or around $12 million. If the deal hadn't gone through, Boyle adds, Cumulus would've lost that $80 million.
| Feeling Puffy? |
Cumulus losing altitude.