Editing Cumulus Media (section)

===Challenges in 2000===
Cumulus was a part-time participant in the euphoria of the [[dot-com bubble]] and was impacted by the hysteria that followed its burst. The reasons included very rapid growth and skyrocketing share price which in the euphoria period fed on itself. The hysteria which followed was driven by both the absence of earnings and rumors which suggested the rapid growth might be false.

The first quarter of 2000 proved to be troubling at Cumulus. A perfect storm of events drove the company's share price from $50 to $13 between January 1 and March 17 when over 30 million shares traded hands. Driving the decline was persistent rumours of possible accounting irregularities in the rapidly assembled radio group. On January 14 respected Wall Street analyst Frank Bodenchak advised institutional clients that Cumulus may miss his estimates for Q4 1999 and the year. A combination of the possible earnings miss and the rumours of accounting problems created a significant loss of investor confidence.

On March 17, Cumulus reported a loss of $0.20 per share vs $0.15 per share expectation.<ref>{{cite web|url=https://money.cnn.com/2000/03/17/companies/cumulus/|title=Cumulus Media shares dive – Mar. 17, 2000|publisher=CNN|access-date=November 30, 2017}}</ref> Broadcast cash flow was $12.3&nbsp;million vs estimates around $17&nbsp;million. In addition the Company reported that company CFO Rick Bonick had left earlier in January. It was not officially announced a fact that CNN Money says "roiled the already active rumour mill about accounting irregularities. The company also reported it would restate quarterly revenues in 1999 as some markets did not comply with Cumulus' revenue recognition policies and booked some advertising contracts for their full value rather than recognizing revenue as the ads aired. As a result, class-action lawsuits were filed against Cumulus charging the company with artificially inflating revenue and profit in 1999. PricewaterhouseCoopers, the company's auditors resigned in April citing material weaknesses in the Cumulus' financial controls<ref>{{cite web|url=https://news.google.com/newspapers?nid=1683&dat=20000425&id=1LsaAAAAIBAJ&pg=4371,5245676&hl=en|title=Milwaukee Journal Sentinel – Google News Archive Search|access-date=March 28, 2018}}{{Dead link|date=April 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> arising from the possible revenue restatements.

Meanwhile, Dickey had taken over day-to-day station operations from Bungeroth who resigned in mid January.

During this same period Weening got into a dispute with the SEC over his proposal to reverse some of his and Dickey's 1999 compensation to help offset the earnings miss. While the proposal was never implemented, the SEC maintained it would have amounted to earnings management and was therefore an infraction. Weening finally agreed to pay a fine of $75,000 without conceding wrongdoing to settle the matter in 2003.

As the dust began to settle in April 2000 the company issued revised annual 10K reports for 1998 and 1999 that showed minor variations in quarterly revenue and adjusted net loss for 1999 from $20.8&nbsp;million to $13.6&nbsp;million and net loss for 1998 was restated from $13.7&nbsp;million to $8&nbsp;million, after the company found a $4.9&nbsp;million tax benefit that had been under-reported. The restatement as it turns out had no material impact on the financials but in the context of the dot-com bust hysteria rumours of accounting irregularities drove a significant decrease in share price which threatened the company's ability to finance pending acquisitions.