Salem Media Group is now the third radio company to face being delisted from a major stock market this year. On June 23, Salem received a letter from The Nasdaq Stock Market stating that its common stock failed to comply with the $1 minimum bid price requirement for continued listing on The Nasdaq Capital Market.
The company has been given a compliance period of 180 calendar days to regain compliance by achieving a minimum bid price of $1.00 per share for a minimum of ten consecutive business days. In an SEC filing, Salem said it, “intends to monitor the closing bid price of the Common Stock and may, if appropriate, consider implementing available options to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.”
Salem now joins the ranks of Audacy, who was delisted from the New York Stock Exchange in May after being notified of its own non-compliance, and Urban One, who received two delisting warnings from Nasdaq after failing to submit a 2022 Annual Report with the SEC.
They do have more than solid growth across streaming platforms. The AM properties will continue to lose ground, but that’s an industry problem more than a Salem problem.
They do need to invest in some younger talent, all of their anchor personalities are senior citizens.
Salems delisting is inevitable. Their “core” is AM Radio Stations, which is a product with a shrinking ( dying ) audience. However, they have their hands in Digital Media, Podcasting, Streaming audio etc and are showing some gains in that arena. But that is a small portion of their overall business portfolio. If they ever hit $2/share, I’ll cash my shares in and say goodbye.
Salem values the broadcast licenses at ~$300 million per the 10Q. Broadcast remains the core business. They have about 120 stations with the majority AM, some with limited coverage FM translators. Nevertheless that works out to around $2.5 million or so per primary license. That seems optimistic. The days when a broadcast license meant there was a “moat” around the local distribution piece are fading. Only car penetration really remains effectively exclusive to broadcast. Long term SALM debt of $150+ million seems closer to what the stations might bring. So the cap value underlying is probably near zero and only the sales and programming engine (the employees) contributes value. The biz in general is aging out and a $2/share valuation is probably not in the cards. I hold a few thousand and am thinking of winding down the position. I must not be alone since the price has been drifting down all year. Delisting will make a wind-down harder.
The delisting of Salem stock is not really a reflection of the mainstream radio industry. To be sure, Salem has been profitable. But their stations are syndicated commercial Christian fund-raising programs, and syndicated right wing talk shows. They are niche stations, not mainstream stations.
Time to pray.