Tuesday, June 20, 2023
Townsquare is a community-focused digital media and digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the U.S. Our assets include a subscription digital marketing services business, Townsquare Interactive, providing website design, creation and hosting, search engine optimization, social media and online reputation management as well as other digital monthly services for approximately 26,800 SMBs; a robust digital advertising division, Townsquare IGNITE, a powerful combination of a) an owned and operated portfolio of more than 330 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data, and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 321 local terrestrial radio stations in 67 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.com, and NJ101.5.com and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Repurchase at a discount. The company announced that it repurchased and retired 1.5 million shares from Madison Square Garden Company (MSG) at $9.70 per share, an 8.5% discount on the recent market price. The share repurchase accounts for nearly half of MSG’s previous ownership, and approximately 8.5% of total TSQ shares outstanding. The move follows an earlier move to initiate a hefty quarterly dividend. Separately, the TSQ shares will join the Russell 3000 and Small-Cap Russell 2000 Indices.
Ample liquidity, accretive to per share estimates. We estimate that the company had $67 million in cash prior to the repurchase and retains a substantial cash position following the transaction. The move is accretive to cash flow and earnings per share estimates, which are being adjusted to reflect the fewer shares outstanding.
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