Apparently, investors are concerned that taking the $4.10-per-share deal Smulyan offered would cause them to lose out on the (potential) future profitability of NextRadio.
In addition to the broadcaster’s 19 FM and four AM radio stations, the company is pushing its FM chip app hard, arguing it has the potential to be “disruptive” and compete with the likes of Pandora and Spotify (despite its absence on Apple devices). Smulyan has been clear that, despite signing on Home Depot as a national advertiser, the app is not anywhere near profitable.
Nonetheless, “Investors aren’t interested in warnings. They only see potential value that Smulyan could have unlocked for himself in a private company,” Briggs writes.
If Smulyan is right — and investors clearly think he is —NextRadio could be worth hundreds of millions of dollars, if not $1 billion. And for investors who have sat on stock that hasn’t increased in value for years, that hope is worthing holding onto.