When the economy starting hammering the broadcasting business last year, Gray Television President-COO Robert Prather kept the faith, telling security analysts that he was putting most of his personal wealth into his company’s depressed stock, then trading at around $4.
After months and months of stomach-churning uncertainty that saw those shares trade as low as 19 cents a year ago, Prather should be feeling a little better about his retirement strategy.
Since the end of the first quarter, Gray shares, along with those of other pure-play station groups, have rebounded nicely. Gray closed yesterday at $2.15.
While covenant violations, loan defaults and bankruptcies still loom over the beat-up sector, the upward swing in stock and debt prices is a sign that investors think revenues–and the broadcasting business–have bottomed out.
“My impression was that Wall Street six months ago thought that we were all going into bankruptcy or restructuring or something,” Prather says, noting that improving bond prices apparently led the way. More…