Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (225254)	3/4/2003 12:52:17 PM
From: reaper	Respond to of 436258

re EMMS, yes i do. i was mostly unsuccessful in a broad media short about a year ago, but i kept Emmis, Radio One (urban), and the Hispanic stations (EVC; HSP; SBSA). the hispanic thing has largely played out to the downside, so the only positions of any size are EMMS and ROIA. Emmis is an OK company but they IMO have a management team that keeps making the wrong decisions at the wrong time and wasting shareholder capital. case in point was a deal they announced yesterday; over $100mm for a 50% interest in a cluster of stations in Austin TX that generate not quite $10mm in broadcast cash flow annually. so they paid over 20x cash generation for these assets, which is a LOT. now, maybe one could argue that they can improve the assets and generate more cash (thus lowering the purchase multiple) but i'm pretty sure this cluster already is #2 in the market with 30%+ share so there's not exactly a world of improvement to be accomplished there. basically IMO these guys had some money burning a hole in their pocket and they went out and spent it, price be damned. stock got downgraded by a couple of folks yesterday. one, 'cause they paid too much. two, 'cause leverage is now over 7x EBITDA i think (and before you laugh at EBITDA (which of course you should) do note that in radio EBITDA actually IS a decent approximation of cash flow as there is very little maintenance capex or working capital needed), which is higher than people want to see. while Clear Channel (CCU) certainly has its problems, it is now cheaper than most of the smaller radio companies so i think that contributed to the EMMS sell-off the last couple days. i don't know about EMMS from here; not as exciting as it was in the low $20s. radio assets generally generate good free cash; if you're banking on an economic scenario where EMMS is going to run into liquidity troubles a lot of other companies are going to run into bigger liquidity troubles first. Cheers