Shares of Comscore (NASDAQ:SCOR), an evaluator of media performance across platforms, jumped as much as 26%, before settling for a 12% gain Friday morning, after the company announced a strategic investment by Charter Communications, Qurate Retail, and Cerberus.
Charter, Qurate, and Cerberus will each make a cash investment for shares of convertible preferred stock, Comscore will use the proceeds from those investments to wipe its debt slate clean and enhance its liquidity. Each investor will receive 27.5 million convertible preferred shares at $2.47 per share, with voting rights capped at 16.66%. For common shareholders, this is broadly good news as the company could use the financial flexibility, especially considering its stock price has declined 88% over the past three years.
The improved balance sheet is good news for common shareholders, but there's more to this deal beyond financials. Also included in the strategic investment is a deal between Comscore and Charter that will expand the former's impressions-based measurement through an extended data license agreement. Further, Cerberus comes on board with additional capabilities in data, analytics, and programmatic ads. While the company will have to achieve these potential benefits, it's a positive step for common shareholders that Comscore is now more sound financially and also has strategic partners to help boost its business capabilities and product offerings to media companies. A 12% pop in stock price today seems justified.