Shares of Entercom Communications (ETM) were tumbling 16% in morning trading Wednesday after the radio broadcaster reported fourth-quarter revenue that was up 19% sequentially, but down 22% year over year.
CEO David Field said "the pandemic continues to hobble a large number of our advertisers, particularly locally," but he was hopeful the combination of widely distributed vaccines, new stimulus spending, and pent-up consumer demand would drive a strong recovery.
Entercom stock is up 150% so far this year, even after the drubbing it's taking today, on a rally that largely began last October after it announced it had signed a six-year deal with Flutter Entertainment's (PDYPF 0.05%) FanDuel as its official sportsbook partner. Entercom says it's "the largest advertising deal in the history of the radio industry." Flutter is the world's largest bookmaker.
Sports betting has become a hot growth market since the ban on it was overturned in 2018. FanDuel has quickly become the largest sportsbook in the U.S.
In the fourth quarter, Entercom acquired QL Gaming, a platform that provides sports-betting data and predictive analytics that the broadcaster believes complements its sports audio business.
The fall in Entercom Communications stock today may be a case of buy the rumor, sell the news for the radio broadcaster.