No one can say that Cumulus Media (Nasdaq: CMLS) doesn't know how to dream big.
The radio-station operator commanding a mere $200 million in market cap is making a $2.4 billion bid for larger rival Citadel Broadcasting. If successful, the new company would be the country's third-largest terrestrial-radio operator.
This isn't the first time a radio provider has aimed higher to bulk up. When Sirius merged with XM to form Sirius XM Radio (Nasdaq: SIRI), it was the smaller Sirius Satellite Radio that went on to call the shots.
However, it's not fair to compare the meandering ways of conventional radio today to the growth potential for premium satellite radio when Sirius and XM hooked up a few years ago. Terrestrial radio began to bounce back last year, but it was coming off depressed 2009 levels. The real test will be whether it can continue to grow as hardcore listeners migrate to satellite radio or begin exploring Web-based options that are becoming more easily accessible on the road.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Advertising is big business in China. Focus Media (Nasdaq: FMCN) and its fleet of hundreds of thousands of LCD screens and poster frames were enough to grow revenue by 45% and earnings by 71% in its latest quarter.
- Hewlett-Packard (NYSE: HPQ) is denying rumors that it's looking to sell its PC business. That's a good thing, since CEO Leo Apotheker wants to put the webOS platform it acquired from Palm last year on all PCs it sells in 2012.
- Chinese Web-based bookseller Dangdang (Nasdaq: DANG) needs to beef up its margins. The e-tailer's sales soared by 59% in its latest quarter, but adjusted earnings took a 25% hit.
- A surge in rare-earth oxide prices helped Molycorp (NYSE: MCP) post a 154% top-line spurt. Chevron has to be kicking itself for selling out to Molycorp a few years ago.
- It was a bad week for McDonald's (NYSE: MCD) fans. The company posted uninspiring stateside sales for February, and it was also revealed that Subway has overtaken McDonald's in terms of total restaurants. It's enough to make a shareholder grimace.
Until next week, I remain,
Rick Munarriz
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