*Radio One – the nation’s leading Black oriented radio network – has approved a plan for a reverse stock split.
The plan will not increase the underlying value of the company, but it will likely increase the per-share price of the company’s stock.
Companies normally do reverse stock splits when the value of their stock falls below one dollar a share. Indeed, Radio One had been under pressure from stock exchanges to raise its per share price or face delisting.
Radio One operates over 50 radio stations across the country targeting the African American market. But in recent years the public firm has struggled financially.
It has been forced to sell several of its stations in order to raise capital and reduce debt. And its share price has fallen from $8.00 just two years ago to as low as 20 cents a share.
However, last month, average closing prices have ranged from $3.00 to $3.80
Radio One was founded in 1980 by entrepreneur Cathy Hughes but is currently being ran by her son Alfred Liggins. (source: Taylor Media Services)