Shares of Clear Channel Communications tumbled more than 16% on Tuesday as investors booed the departure of Randy Michaels as chairman and chief executive of the company’s flagship radio unit.
After the market close Monday, Clear Channel said Michaels, a former radio shock jock, would vacate his post and move to a new job as head of the company’s new technologies division.
The company has not yet picked a successor, but rumors have begun to circulate in the biz that recently ousted AOL Time Warner exec Robert Pittman –a radio veteran — is in the running. Clear Channel declined to comment on the speculation.
The stock downturn came despite news that Clear Channel expects to top its guidance for second-quarter cash flow of $600 million-$615 million when it releases its financial results today. Conglom did not say precisely how much higher the cash-flow numbers would go.
Clear Channel’s New York Stock Exchange-listed stock seesawed between being down almost $5 to $25 in Tuesday’s trading. The company’s shares had declined as much as 30% early in the day.
The radio division, which boasts more than 1,200 stations nationwide, has come under increasing scrutiny over its leading role in consolidating the industry and its relationships with independent promoters. Criticism increased in June when Sen. Russell Feingold (D-Wis.) introduced a bill aimed at curbing the power of the largest radio congloms.
That pressure has spurred a free fall in Clear Channel stock: Over the past two months, the shares have sunk by more than 50% from recent highs of about $55 in June. Company traded as high as $62 at the beginning of the year.