Image Credit: Diverse Stock Photos (Flickr)

The DWAC SPAC Acquiring Trump Media Keeps Investors on Edge

When a SPAC, such as Digital World Acquisition Corp. (DWAC), soon to become Trump Media & Technology Group (TMTG), enters the DeSPAC phase, the terms are set, but the world keeps turning. For this reason, investors and potential investors need to continue to monitor events impacting the industry and the company to be acquired. There have been many surprises since October for DWAC shareholders, the past three days have been particularly challenging for investors to unravel.

Background

Since Trump Media agreed to be acquired on October 20, 2021, much has happened that could impact the company and the industry. These include an SEC probe of the deal, post-pandemic changes in users’ lifestyles, a frigid national relationship developing with Russia, and Twitter agreeing to be taken private by a “free speech” purchaser. Even when a SPAC’s formal ownership change hasn’t yet taken place, understanding the stock’s outlook (and future versions of the company) is as important as any other public company, perhaps a little more complex.

Source: Koyfin

The Trump Media example is star-studded and has faced renewed uncertainty within the past two weeks. When Elon Musk succeeded in striking a deal to take Twitter private for the purpose of providing a “platform for free speech around the globe,” this instantly created competition for the media start-up being acquired by the Digital Media SPAC.  And it has caused gyrations in the price for the pre-merger stage for DWAC, which hit a 30-day low of $33.25 the day of the announcement (April 25) and then bounced significantly up to $47.36 as the future owner of the well-established Twitter demonstrated through various Tweets, that the companies are not really competitors, but instead exist for similar purposes.

On April 27 Elon Musk gave DWACs share price a boost when he Tweeted “Truth Social is currently beating Twitter & TikTok on the Apple Store.” While Musk envisions Twitter as providing a platform for free speech around the globe, the smaller start-up social platform claims to be, “a free-speech haven without viewpoint discrimination or oppressive censorship.” If Musk is true to his stated purpose, the two may actually complement each other.

Take-Away

Investing in a SPAC with the trust that the acquisition company can steer the capital into a purchase you may not otherwise have been fortunate enough to participate in, is one reason for investors to allocate assets to SPACs. When the target has been identified and the deal requires a choice by the investor, information is important. Should an investor decide to be part of the deal and hold the acquisition company during the De-SPAC stage, they need to continue to be alert as to changes in the industry and the now identified company to be merged.

A perfect example of the challenges is the DWAC / Twitter scenario that DWAC shareholders are faced with. The company to be acquired seems to have had one of its mega-competitors working to steer its product line even closer to that of the small fledgling company.

Channelchek helps keep investors in smaller companies informed with quality research, insightful articles, and SPACtrac for select SPACs. Register for emails here.

As for the former President’s comments, Trump said, 

“I am not going on Twitter, I am going to stay on TRUTH,” Prior to the purchase the former President stated, “I hope Elon buys Twitter because he’ll make improvements to it and he is a good man” 

Paul Hoffman

Managing Editor, Channelchek

Suggested Content

Investors Watch Media SPAC Stay in the Green as Markets Falter

De-SPAC – The Final Phase of a Special Purpose Acquisition Company

SPACtrac Report – Forbes Global Media Holdings

Capstar Special Purpose Acquisition Corp. Class A (Video)

Sources

https://www.prnewswire.com/news-releases/rumble-sets-new-all-time-records-across-all-key-performance-measures-301519357.html

https://www.sec.gov/Archives/edgar/data/0001849635/000110465921128231/tm2130724d1_ex99-1.htm

https://www.prnewswire.com/news-releases/elon-musk-to-acquire-twitter-301532245.html

https://www.cbsnews.com/news/trump-media-technology-group-investors-digital-world-acquisition-spac/

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Wednesday, April 27, 2022

Engine Gaming and Media (GAME)(GAME:CA)
A Streamlined Path Toward Positive Cash Flow

Engine Media Holdings Inc is engaged in esports data provision, esports tournament hosting, and esports racing. Its brand profile includes Eden Games, Allin sports, and UMG, and others. The company’s operating segments include E-Sports; Media and Advertising and Corporate and Other. It generates maximum revenue from the Media and Advertising segment. The Media and Advertising segment includes platform and advertising services provided to other broadcasters, primarily local tv and radio broadcasters.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Noblecon 18 highlights. Tom Rogers, Executive Chairman, and Lou Schwartz, CEO, outlined the new strategy of the company at Noblecon18 following important recent developments, considered to be shareholder friendly. To view this fireside chat which provided detail on its plan to streamlined operations and swing toward positive cash flow, click here.

New strategy.  Recently Engine shifted its focus towards media and advertising, with a special focus on social influencer marketing. Importantly, the sector trends appear favorable, with the influencer marketing industry expected to grow at a 30% CAGR from 2021 to 2025. Management identified its differentiation from competitors in the growing live-streaming platforms and social media platforms …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Wednesday, April 27, 2022

Entravision Communications (EVC)
The One To Watch

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision owns and/or operates 53 primary television stations and is the largest affiliate group of both the top-ranked Univision television network and Univision’s TeleFutura network, with television stations in 20 of the nation’s top 50 Hispanic markets. The Company also operates one of the nation’s largest groups of primarily Spanish-language radio stations, consisting of 48 owned and operated radio stations.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Noblecon 18 highlights. CEO, Chris Young, touched on several topics including the company’s digital and global transformation, attractive leverage position, the company’s high cash flow, its attractive Latino TV business, and recent expense reductions. The full replay of the presentation can be found here.

Digital sales rep.  Over the last several years, the company’s acquisitions of businesses like Cisneros, Media Donuts, and 365 Digital, have transformed it into a digital-based media company. Many of the digital businesses focus on selling advertisements for social media platforms in emerging markets, like Latin America, South Africa, and the Pacific rim. Digital revenue now accounts for more than …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Wednesday, April 27, 2022

Harte Hanks (HHS)
The Art Of A Turnaround

Harte-Hanks is a marketing services company that provides multichannel marketing solutions as well as consulting, data analytics, and strategic assessment. The company’s offerings focus on business-to-business, retail, finance, and automotive segments through digital, social, mobile, and print media offerings. Harte-Hanks strives to develop better customer relationships through its marketing and analytical services for clients. The majority of its revenue is derived from its marketing services in the retail, technology, and consumer brand segments.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

NobleCon18 highlights. Brian Linscott, CEO, and Lauri Kearnes, CFO, presented at NobleCon18 highlighting that the company has successfully pivoted from surviving to thriving. To watch a full replay of the presentation, please click here.

Customer Care keeps rolling.  The Customer Care segment represented 38% of total revenues in 2021, growing 27.3% on a YoY basis. As a result of technology investments and an asset-lite strategy, the company has been able to decrease fixed costs and reduce its footprint in the division. Management is optimistic about expansion opportunities. The business could have the capacity to generate $1 million …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Wednesday, April 27, 2022

Salem Media (SALM)
Highlights Its Significant Digital Businesses

Salem Media Group is America’s leading radio broadcaster, Internet content provider, and magazine and book publisher targeting audiences interested in Christian and family-themed content and conservative values. In addition to its radio properties, Salem owns Salem Radio Network, which syndicates talk, news and music programming to approximately 2700 affiliates; Salem Radio Representatives, a national radio advertising sales force; Salem Web Network, a leading Internet provider of Christian content and online streaming; and Salem Publishing, a leading publisher of Christian themed magazines. Salem owns and operates 115 radio stations, with 73 stations in the nation’s top 25 top markets – and 25 in the top 10. Each of our radio properties has a full portfolio of broadcast and digital marketing opportunities.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

NobleCon18 highlights. Evan Masyr, CFO, updated the company’s presentation to highlight its compelling digital businesses, which represent a solid 29% of total company revenues. These businesses have grown revenues at a 17% compound annual growth rate over the past 3 years. To watch a full replay of the presentation, please click here.

A durable broadcast business.  Block programming, in which non-profits purchase ad-free air time and fund it through contributions from their audiences, is the largest component of the Radio segment, at 47% of Radio revenue and 28% of total company revenue. There are very high renewal rates of over 95% annually for the format, which tends to be very recession resilient. In 2022, the Block …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Wednesday, April 27, 2022

Townsquare Media (TSQ)
A Mispriced Stock?

Townsquare Media Inc is an entertainment and media company offering digital marketing solutions in the United States and Canada. It owns and operates radio stations, social media properties focusing the small and mid-cap companies. Services offered to the clients include live events, local advertising, digital advertising, e-commerce offerings, few others. The segments through which the company operates its businesses are classified into Local marketing solutions and Entertainment segments. Revenues are generated from commercials through broadcasts and sale of internet based advertisements.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Noblecon 18 highlights. Townsquare CFO, Bill Wilson, presented at Noblecon18, speaking on a range of topics such as, the company’s evolution from a pure-play broadcaster to a digital-first company, the competitive advantages to bringing a scaled operation to small markets, and the organic nature of digital revenue growth. The full replay of the presentation can be found here.

Fast-growing digital.  Mr. Wilson highlighted the robust growth of the company’s Digital businesses, noting that digital advertising is the fastest growing segment of the business, growing 20.5% in 2021. The company’s digital marketing solutions business has also experienced impressive growth with record net subscriber additions in both 2020 and 2021 …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Tuesday, April 26, 2022

Cumulus Media (CMLS)
Undervalued In Spite Of The Recent Move

CUMULUS MEDIA, Inc. (NASDAQ: CMLS) is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYS, the American Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with local impact and national reach through on-air, digital, mobile, and voice-activated media solutions, as well as access to integrated digital marketing services, powerful influencers, and live event experiences. CUMULUS MEDIA is the only audio media company to provide marketers with local and national advertising performance guarantees.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

NobleCon 18 highlights Frank Lopez-Balboa, CFO, and Collin Jones, Corporate Development, held a fireside chat and outlined its operational and debt reduction strategy. In addition, management highlighted an improved financial profile given a rebounding advertising environment. A replay of the company’s presentation may be found here.

Recovery at full speed.  Management declared that advertising is recovering beyond pre-pandemic levels, thanks to emerging categories such as sports betting and crypto currencies, as well as a strong comeback in entertainment and finance ad categories. These trends offset auto, which is not expected to be rebound now until 2023. Additionally, in 2022, political revenue is expected to surpass the …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Tuesday, April 26, 2022

Lee Enterprises, Inc. (LEE)
Digital To Drive Swing Toward Revenue Growth

Lee Enterprises Inc is a local news publication company in the United States. Its products include daily and Sunday newspapers, weekly newspapers and classified and few other specialty publications. Its products are used as a platform for advertising in mid-size markets. Revenues are generated primarily from retail and classifieds advertising and the remaining from subscriptions to its printed and digital products.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Noblecon 18 highlights. Kevin Mowbray, CEO, and Tim Millage, CFO highlighted its leading digital products and services. It is differentiated from its peers with industry leading digital subscription growth, strong digital advertising revenue from its digital agency business and compelling digital reach, with 47 million unique visitors each month. To watch a full replay of the presentation, please click here.

Local focus driving subscriptions.  Management highlighted the company’s fast growing local market-focused digital subscription business. Lee’s digital subscription growth has outpaced Gannett and the New York Times for the last 9 quarters running. Lee already serves 450,000 digital-only subscribers, a 57% increase on a year-over-year basis …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Salem Media Announces the Appointment of Scott Furrow at its 99.5 KKLA Station

Research, News, and Market Data on Salem Media

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) announced today that Scott Furrow has been appointed host of ‘SoCal Live’, weekday afternoons 3-5pm on 99.5 FM KKLA.

Scott Furrow (Photo: Business Wire)

Born and raised in Southern California, Scott graduated from UC Riverside, earning a bachelor’s degree in history/law and society. Scott’s career has included roles in politics, government, media relations, as well as the corporate marketplace. He received his Master of Divinity degree from Bethel Theological Seminary in San Diego. A pastor for 25 years, Scott served as Senior Pastor of the First Baptist Church of San Diego for the past 18 years.

99.5 KKLA Director of Programming, Rodney Miller commented, “Today’s announcement comes on the heels of an eight-month nationwide search which included fill-in SoCal LIVE guest hosts Bob Lepine, Pastor Dudley Rutherford, and New Life Live’s Steve Arterburn. We are grateful and appreciative to everyone who stepped in and gave so much of their time and talent during this search.”

Miller added, “I was extremely impressed with Scott Furrow’s decision two years ago to not only serve as Senior Pastor, but also host a daily radio program on sister station KPRZ in San Diego. Scott left his sermon notes at the Church and instead brought in the top news stories discussing them from a spiritual and values perspective. On ‘SoCal Live’, Scott will have two hours each weekday to bring hope and encourage our listeners to be salt and light in today’s rapidly changing culture.”

According to Salem Los Angeles Vice President/General Manager Terry Fahy, “Scott combines a quick wit, theological knowledge and wisdom, a strong grasp of the news, and empathy for issues facing our listeners. It’s a winning combination for talk radio in Southern California.”

Scott Furrow commented, “As a pastor, my passion and my calling has been encouraging people to grow in their faith and to be more Kingdom-minded in everyday life. Hosting the ‘SoCal LIVE’ weekday program on 99.5 FM KKLA will enable me to do that on a much larger scale. I can hardly wait!”

Scott Furrow will also be heard on FM 106.1/AM 1210 KPRZ weekday afternoons 3-5pm.

ABOUT SALEM MEDIA GROUP:

Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.

Evan D. Masyr
Executive Vice President and Chief Financial Officer
(805) 384-4512
evan@salemmedia.com

Source: Salem Media Group, Inc.

NAB’s Leadership Foundation Selects Five Gray Television Stations As Finalists for 2022 Service to America Awards

Research, News, and Market Data on Gray Television

Gray Contacts:

Website: www.gray.tv
Bob Smith, Chief Operating Officer, 404-266-8333
Kevin P. Latek, Chief Legal and Development Officer, 404-266-8333

Image: Daniel Oberhaus (Flickr)

What Would Failure Look Like to Elon Musk if He Buys Twitter?

Elon Musk is a winner. We witness his success daily, after all, he’s the richest person in the world. No one else can say that right now. But the challenges that took the South African-born immigrant from poor college student to his current status were not a straight line. And, taking over Twitter won’t be a sure win either, yet he is betting a lot of his previous financial success on his ability to acquire it and run it successfully.

As innovative, crafty and wealthy as Musk is, this potential acquisition of the social media giant, may put him in a political arena like he has never experienced before. Musk could find himself in a “deathmatch” with those that control the rules – in the ring with some that have been powerful enough to shape the version of Twitter that he is now trying to steer back toward inclusion.

Buying Twitter is not the Win

“Failure is an option here. If things are not failing you are not innovating.” – Elon Musk

The above Elon Musk quote was said prior to 2022. But, it is helpful to understand; he thrives on the challenge of doing things different, trying to do things that are meaningful. While many Elon fans are watching and expecting this larger-than-life person to handily succeed, he’s human and this deal must make him somewhat uncomfortable.

For Elon, success in buying Twitter, a company that had already reached a valuation well above his bid, is not the win. Transforming and re-innovating Twitter, against the wishes of many senior department heads, and against many political interests, is the ultimate goal. This could become a nightmare, after all, successfully sending a reusable rocket round trip into space is just physics, going against the grain of powerful people that want you to fail, goes beyond physics. It may present unseen, non-science challenges.

The Risk

Self-made billionaires don’t reach that category by depositing their paycheck into a JP Morgan Chase bank account to earn .01%. They get it by risking a great deal, by hiring the right team, putting in the necessary work, and maybe getting some breaks along the way. This is the largest acquisition financing ever by one person. It’s not chump change for Elon who is doing it his own unique way. He’s a proven manager, but he’ll be spreading himself thinner if he buys Twitter. And, may not find he is getting too many breaks from those in power positions.

More than two-thirds of the $46.5 billion financing package that Musk unveiled on Thursday (April 21) for his bid for Twitter would come from his own assets, the remainder would come from bank loans secured against Twitter’s assets. Typically, the majority of a buyout of this magnitude is funded by securing most of the debt against the acquired. Elon is taking two-thirds of the “lien” himself.

The banks approached showed concern that the regulators may reprimand them because of the size of the risk they would be putting on their balance sheet. The lack of cash flow from Twitter also created concern. They may have also been troubled that the would-be acquirer said he doesn’t care about the economics of the deal “at all.” Musk said that he was pursuing the acquisition because it was “extremely important to the future of civilization.”

The banks may have also pondered that Musk has suggested that he may move Twitter away from advertising, Twitter relies on ads for the majority of its revenue.

What amplifies the challenge for Tesla’s CEO is he has agreed to take out a $12.5 billion margin loan, secured against his Tesla (TSLA) stock to pay for a portion of the $33.5 billion. Were Tesla’s stock to drop by 40%, he would have to repay that margin loan, according to a regulatory filing.

The Twitter Side

Musk is the world’s richest person, with a net worth listed by Forbes of $270 billion. Yet most of his wealth is tied up in Tesla shares, and the proposed deal structure would dry up most of his available liquidity. Twitter’s board plans to ask Musk to provide more details on the source of the cash he has promised to deliver, according to people familiar with the matter.

Twitter’s board is preparing to reject Musk’s bid as too low by April 28, when the company is scheduled to report first-quarter earnings, sources have said.

Musk, who has amassed a stake in Twitter of 9.2%, said on Wednesday he’d be exploring taking a bid directly to Twitter’s shareholders via a tender
offer. In that scenario, shareholders would not be able to sell their shares, because of the poison pill Twitter created. The shareholders would however be able to register their support for Musk’s bid.

Paul Hoffman

Managing Editor, Channelchek

Suggested Reading

Why Poison Pills Have Been Effective at Warding off Unsolicited Offers

Jack Dorsey, Corporate Boards, and Bad Apples

As Dorsey’s Tweet Exemplifies, NFT Market is Still Maturing

Placing a Bid to Own a Public Company

Sources

https://www.chase.com/content/dam/chase-ux/ratesheets/pdfs/rdny1.pdf

https://www.inc.com/alyssa-satara/in-2-sentences-elon-musk-explains-why-key-to-success-is-failure.html.

https://www.reuters.com/business/musk-tears-up-buyout-playbook-with-465-bln-twitter-financing-2022-04-22/

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Monday, April 18, 2022

Engine Gaming and Media (GAME)(GAME:CA)
Shareholder Friendly Actions

Engine Media Holdings Inc is engaged in esports data provision, esports tournament hosting, and esports racing. Its brand profile includes Eden Games, Allin sports, and UMG, and others. The company’s operating segments include E-Sports; Media and Advertising and Corporate and Other. It generates maximum revenue from the Media and Advertising segment. The Media and Advertising segment includes platform and advertising services provided to other broadcasters, primarily local tv and radio broadcasters.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Favorable Q2 results. Fiscal Q2 results reflected the sale of Eden Games. On a comparable basis, treating Eden as discontinued operations, Q2 revenues grew a strong 20% to $9.26 million, with an adj. EBITDA loss of $6.4 million, better than the year earlier loss.

Re-focusing the business.  Following the sale of Eden Games, the company is expected to streamline its businesses and lower its cash burn. Management indicated the company may divest of UMG and Windview. We view this potential move favorably as it will allow management to tend to its strong growth oriented businesses, sharpen the focus of the company, and put the company on a path toward positive …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.