Cumulus executives have hinted that a reverse stock split was a possibility and now they are taking the steps to make an 8-for-1 reverse stock split happen. A shareholder meeting is being set up to vote on approving the reverse stock split and the SEC has been notified with this filing.
The company has been unable to keep its stock price of at least $1.00 for 30 consecutive trading days, which is a requirement on the NASDAQ. The company says, in the filing, that “the primary intent of increasing the price of our Class A Common Stock to regain compliance with this listing requirement. If it is not approved and adopted, we may be unable to maintain the listing of our Class A Common Stock on NASDAQ, which could adversely affect the liquidity and marketability of our Class A Common Stock. We believe that the Reverse Stock Split will make our Class A Common Stock a more attractive and cost-effective investment for many investors, which may enhance the liquidity of our Class A Common Stock for holders and potential holders.”
The filing also shows that Crestview owns nearly 73 million shares of Cumulus or 30% of the company. Former CEO Lew Dickey owns 28.1 million shares or 11% of the company. If approved, this action would reduce the number of Cumulus Class A shares from 750 million to 93.7 million.