LiveOne (Nasdaq: LVO) Announces $11.3M Series A Preferred Stock Conversion to Common Stock at $2.10 per Share, Led by Harvest Small Cap Partners Master, Ltd. and Trinad Capital Master Fund
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Insights
The conversion of preferred stock into common stock by a key investor in LiveOne has multiple financial implications. Firstly, the elimination of $2.0M in annual cash dividends will improve the company's cash flow, which is a critical metric for financial health and operational flexibility. This move suggests a shift in the investor's approach from seeking immediate income to a long-term growth strategy, indicating confidence in the company's prospects. Additionally, the removal of $5M in redeemable mezzanine equity is a positive step towards simplifying the capital structure, which can make the stock more attractive to institutional investors, as evidenced by the broadening of institutional ownership to approximately 35%.
Another aspect to consider is the eligibility to join the Russell 2000 index by May 2024. Inclusion in this index often leads to increased visibility and potentially higher liquidity due to the automatic inclusion in index funds and ETFs that track the Russell 2000. However, eligibility does not guarantee inclusion and the benefits would only materialize if the inclusion occurs. Lastly, the acquisition of additional PODC shares at $3 per share could be seen as a strategic move to consolidate holdings in a potentially undervalued asset, but the success of this investment will depend on the future performance of PODC.
The strategic decision by LiveOne's investor to convert preferred stock into common stock has implications beyond the company's balance sheet. From a market perspective, this move can be interpreted as a signal of confidence to other investors and the market at large. When a renowned investor like Jeff Osher makes such a decision, it can influence market sentiment and potentially attract more investors. The conversion price of $2.10 per share also sets a reference point for the market's valuation of the company, which can impact the stock's trading dynamics in the short term.
Furthermore, the company's intention to use the improved cash flow for stock buybacks and accretive acquisitions is a proactive approach to managing shareholder value. Stock buybacks can be a positive signal, suggesting that management believes the stock is undervalued, which might encourage investors to re-evaluate the company's worth. Accretive acquisitions, if executed well, can lead to synergies and enhanced earnings per share, contributing to long-term value creation. However, the effectiveness of these strategies will depend on the execution and market conditions.
- Conversion Eliminates
- Eliminates
- Broadens Institutional Ownership to ~
- LiveOne Currently Eligible to Join Russell 2000 in May 2024
- LiveOne Acquired Additional 159,000 PODC Shares at a Price of
LOS ANGELES, CA, April 03, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire -- Robert Ellin, the CEO and Chairman of LiveOne, stated, “Jeff Osher, the Managing Member of the Harvest Funds, has successfully invested and partnered in many of my companies for over 20 years. He is renowned as one of the best small cap investors around the globe. I’m honored and excited that Jeff has once again shown extraordinary confidence in choosing to convert his interest-bearing perpetual preferred stock into our common stock at
About LiveOne, Inc.
Headquartered in Los Angeles, CA, LiveOne (Nasdaq: LVO) is an award-winning, creator-first, music, entertainment, and technology platform focused on delivering premium experiences and content worldwide through memberships and live and virtual events. The Company’s subsidiaries include Slacker Radio, PodcastOne (Nasdaq: PODC), PPVOne, Gramophone Media, Palm Beach Records, CPS, LiveXLive, DayOne Music Publishing, Drumify and Splitmind. LiveOne is available on iOS, Android, Roku, Apple TV, Spotify, Samsung, Amazon Fire, Android TV, and through STIRR’s OTT applications. For more information, visit liveone.com and follow us on Facebook, Instagram, TikTok, YouTube and Twitter at @liveone. For more investor information, please visit ir.liveone.com.
Forward-Looking Statements
All statements other than statements of historical facts contained in this press release are “forward-looking statements,” which may often, but not always, be identified by the use of such words as “may,” “might,” “will,” “will likely result,” “would,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or the negative of such terms or other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including: LiveOne’s reliance on one key customer for a substantial percentage of its revenue; LiveOne’s ability to consummate any proposed financing, acquisition, spin-out, special dividend, merger, distribution or transaction, the timing of the consummation of any such proposed event, including the risks that a condition to the consummation of any such event would not be satisfied within the expected timeframe or at all, or that the consummation of any proposed financing, acquisition, spin-out, merger, special dividend, distribution or transaction will not occur or whether any such event will enhance shareholder value; LiveOne’s ability to continue as a going concern; LiveOne’s ability to attract, maintain and increase the number of its users and paid members; LiveOne identifying, acquiring, securing and developing content; LiveOne’s intent to repurchase shares of its and/or PodcastOne’s common stock from time to time under LiveOne’s announced stock repurchase program and the timing, price, and quantity of repurchases, if any, under the program; LiveOne’s ability to maintain compliance with certain debt covenants; LiveOne successfully implementing its growth strategy, including relating to its technology platforms and applications; management’s relationships with industry stakeholders; uncertain and unfavorable outcomes in legal proceedings; changes in economic conditions; competition; risks and uncertainties applicable to the businesses of LiveOne’s subsidiaries; and other risks, uncertainties and factors including, but not limited to, those described in LiveOne’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 29, 2023, Quarterly Report on Form 10-Q for the quarter year ended December 31, 2023, filed with the SEC on February 13, 2024, and in LiveOne’s other filings and submissions with the SEC. These forward-looking statements speak only as of the date hereof, and LiveOne disclaims any obligation to update these statements, except as may be required by law. LiveOne intends that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
LiveOne IR Contact:
Liviakis Financial Communications, Inc.
(415) 389-4670
john@liviakis.com
Press Contact:
For LiveOne
press@liveone.com
FAQ
What is LiveOne's CEO, Robert Ellin, announcing?
Who is the Managing Member of the Harvest Funds mentioned in the press release?
At what price did LiveOne acquire an additional 159,000 PODC shares in March 2024?
What is the expected institutional ownership percentage for LiveOne after the recent developments?
When is LiveOne currently eligible to join the Russell 2000?
