3 More Things About Clear Channel Outdoor

Clear Channel Outdoor priced its 100 million share stock offering at $3.50 last Friday.  That means it will raise $400 million if underwriters exercise their shares.  Insider learned three things about Clear Channel Outdoor from the Prospectus.

Billboards in the US, Street Furniture abroad.

Billboards account for 61% of Americas revenues.   Americas is primarily the US.

Street Furniture accounts for 52% of International revenues.  This includes 22 countries in Europe, Latin America and Asia.

A China Hangover

Clear Channel Outdoor will report a decrease in international revenue for the second quarter of 2019 due to “lower revenue from China due to weakening economic conditions as well as increased professional fees related to the investigation in China.”  Several former employees of Clear Media Limited a 50.4% Clear Channel owned subsidiary listed on the Hong Kong stock exchange are part of a police investigation for misappropriated funds.  Clear Channel Outdoor took a $10 million charge relating the the fraud in April 2017.

Four Keys to Clear Channel Outdoor’s Growth

The prospectus outlines four growth initiatives along with Insider’s thought.

  • Digitization of assets.
    • Seems like a no brainer given the results from converting the best static locations to digital.
  • Investing in data.
    • Who isn’t?
  • Improving the programmatic platform.
    • Ditto.
  • Opportunistic M&A.
    • Note the word opportunistic.  Insider does not expect Clear Channel to be a big out of home buyer so long as debt remains high.  There are too many other uses for capital.

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