US/Europe Event-Driven Analyst

John DeMasi

CFA, CPA (New York State, status: inactive) with 20+ years on buyside (PM & analyst) at numerous hedge funds and proprietary trading desks in NYC and London, covering North American and European event driven investments.

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Event-Driven

<a href="https://www.smartkarma.com/entities/iheartmedia" target="_blank" data-smartkarma-citation="entities:28256:1" rel="noopener">iHeartMedia (IHRT US)</a>, the largest owner and operator of radio stations in the U.S., with 854 stations (612 FM and 242 AM), announced on March 14, 2018 an agreement with the majority of its creditors and its financial sponsors for a comprehensive restructuring of its balance sheet to reduce its debt by approximately $10 billion to less than $6 billion. The restructuring was to be pursued through a Chapter 11 <a href="https://cases.primeclerk.com/iHeartMedia/" target="_blank" rel="noopener">bankruptcy</a> process in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
The Plan of Reorganization was confirmed by the Court on January 22, 2019 and the Company exited bankruptcy on May 1, 2019 as “the number one audio company in America.”
The old, closely-held equity was wiped out and creditors and other claimants received new notes, new equity and warrants in the new iHeartMedia, along with the Company’s shares in the publicly-traded, former subsidiary, <a href="https://www.smartkarma.com/entities/clear-channel-outdoor-cl-a" target="_blank" data-smartkarma-citation="entities:5745:1" rel="noopener">Clear Channel Outdoor Cl A (CCO US)</a>, now a completely separate and independent company.
As new, publicly-traded equity securities, IHRT US shares came to the market without an IPO and without a sponsored roadshow and all the hype that usually comes with a new $2 billion equity market capitalization listing. In earlier bankruptcy waves, such as in the 1990s, post-bankruptcy/post-reorg equities were called “orphaned equities” and were often undervalued until the market came to appreciate the value inherent in some of these under-followed gems.
Will IHRT shares provide a similar bounty or has the market already tuned in to a fair valuation?

iHeartMedia (IHRT US), the largest owner and operator of radio stations in the U.S., with 854 stations (612 FM and 242 AM), announced on March 14, 2018 an agreement with the majority of its creditors and its financial sponsors for a comprehensive restructuring of its balance sheet to reduce its debt by approximately $10 billion to less than $6 billion. The restructuring was to be pursued through a Chapter 11 bankruptcy process in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
The Plan of Reorganization was confirmed by the Court on January 22, 2019 and the Company exited bankruptcy on May 1, 2019 as “the number one audio company in America.”
The old, closely-held equity was wiped out and creditors and other claimants received new notes, new equity and warrants in the new iHeartMedia, along with the Company’s shares in the publicly-traded, former subsidiary, Clear Channel Outdoor Cl A (CCO US), now a completely separate and independent company.
As new, publicly-traded equity securities, IHRT US shares came to the market without an IPO and without a sponsored roadshow and all the hype that usually comes with a new $2 billion equity market capitalization listing. In earlier bankruptcy waves, such as in the 1990s, post-bankruptcy/post-reorg equities were called “orphaned equities” and were often undervalued until the market came to appreciate the value inherent in some of these under-followed gems.
Will IHRT shares provide a similar bounty or has the market already tuned in to a fair valuation? 

IHeartMedia, Inc. (IHRT US) – Turn On, Tune In, Cash In