Emmis gets a charge from shareholder
EmptyNEW YORK -- Shares of Emmis Communications rose 5.3% on Thursday after a shareholder urged the broadcaster in a letter to "vigorously" explore strategic alternatives, including the sale of some or all of its assets.
The stock, which has traded between $4.75 and $13.22 during the past year, closed at $5.55. Emmis led Thursday's gainers on The Hollywood Reporter's Showbiz 50 stock index.
The suggestion came after Belo recently said that it plans to separate its TV and newspaper assets into two stocks to unlock shareholder value. Some on Wall Street have predicted that this also could put more pressure on other companies to look for deals or financial engineering to boost their stock prices.
Shareholder Noonday Asset Management said in a letter to Emmis' board, which was filed late Wednesday with the U.S. Securities and Exchange Commission, that it was disappointed by the firm's fiscal second-quarter financials last week. It added that Emmis' current stock price also has frustrated it.
Noonday, which said it owns a 10.4% stake in Emmis, urged management to consider alternatives that would "bring the share price in line with the company's intrinsic value."
Another shareholder called for an Emmis sale last month. These initiatives come after Emmis chairman, CEO and controlling shareholder Jeff Smulyan failed to make another buyout bid for the broadcaster in recent months as many investors and analysts had hoped. He had failed with previous offers.
Emmis last week reported a fiscal second-quarter profit decline of 89% compared with the year-ago period, which benefited from a big gain from discontinued operations. Noonday said it was let down by what it argued was "optimistic reporting of what only can be described as another quarter of disappointing results" by Emmis.