Standard General L.P., a prominent investment firm, recently expanded its portfolio with the acquisition of a substantial stake in MediaCo Holding Inc. (MDIA, Financial). This article provides an in-depth analysis of the transaction, the profiles of both entities, and the potential implications of this significant move in the stock market.
Details of the Transaction
On August 9, 2023, Standard General L.P. added 33,006,252 shares of MediaCo Holding Inc. to its portfolio at a trade price of $0.64 per share. This transaction significantly increased the firm's total holdings in MediaCo to 49,804,379 shares, representing 7.41% of its portfolio and 93.30% of MediaCo's outstanding shares. The trade had a 4.91% impact on Standard General's portfolio.
Profile of Standard General L.P.
Based in New York, Standard General L.P. is a private investment firm that manages event-driven opportunity funds. It focuses on companies with complex capital structures that are undergoing dramatic change or are faced with material events. As of the transaction date, the firm holds five stocks with a total equity of $409 million. Its top holdings include National CineMedia Inc, Tegna Inc, Turning Point Brands Inc, Ballys Corp, and MediaCo Holding Inc. The firm's investments are primarily concentrated in the Consumer Cyclical and Communication Services sectors.
Overview of MediaCo Holding Inc.
MediaCo Holding Inc. is a U.S.-based radio broadcasting media company that operates in radio and digital advertising, premium programming, and events. It owns two radio stations, WQHT-FM and WBLS-FM, serving the New York City metropolitan area. The company generates revenue from various segments including Outdoor Advertising, Radio, Digital, Nontraditional, Other, Radio Advertising, and Single segment. As of the transaction date, the company's market capitalization stands at $16.255 million, with a stock price of $0.628. However, the company's PE percentage of 0.91 indicates it is currently operating at a loss.
Analysis of MediaCo Holding Inc.'s Stock Performance
Since its IPO on January 2, 2020, MediaCo's stock has declined by 42.91%. The stock's year-to-date performance shows a further decrease of 54.49%. The company's GF Score of 48/100 suggests poor future performance potential. Its Financial Strength, Profitability Rank, and Growth Rank are 4/10, 4/10, and 0/10 respectively, indicating a need for improvement in these areas. The company's Piotroski F-Score of 4 further underscores the need for financial stability.
Financial Health of MediaCo Holding Inc.
MediaCo's cash to debt ratio of 0.49 ranks it at 672, suggesting a relatively high level of debt. The company's return on equity (ROE) and return on assets (ROA) are 103.95 and 26.27 respectively, ranking 37 and 22. However, the company's interest coverage is 0.00, indicating it may have difficulty meeting its debt obligations. The company's gross margin and operating margin growth are both at 0.00, indicating lack of growth data.
Growth Metrics of MediaCo Holding Inc.
Over the past three years, MediaCo's revenue growth has declined by 22.20%, and its EBITDA and earnings growth are both at 0.00. This lack of growth is reflected in its revenue growth rank of 816.
Momentum Indicators of MediaCo Holding Inc.
MediaCo's RSI 5 Day, RSI 9 Day, and RSI 14 Day are 20.60, 20.87, and 25.61 respectively, indicating the stock is currently oversold. The company's momentum index 6 - 1 month and momentum index 12 - 1 month are -11.46 and -68.89 respectively, suggesting a negative momentum in the stock's price.
In conclusion, Standard General L.P.'s acquisition of a significant stake in MediaCo Holding Inc. represents a strategic move by the firm. However, given MediaCo's current financial performance and stock indicators, the impact of this transaction on both the stock and the firm's portfolio remains to be seen.
