ACME Communications announced today that they completed the sale of their radio stations. In my initial write-up I estimated that the completion of this transaction would result in an approximate dividend of $1.05/share. It seems that my estimate was significantly off the mark since the company announced today that the special dividend will be $0.93/share. Part of the reason that the dividend is lower than expected is the fact that some cash remains locked up in two escrow accounts:
In addition to the Daily Buzz, the Company has $1.0 million in a one-year escrowed indemnification deposit to Lin Media and $290,000 in a two-year escrowed deposit to the Federal Communications Commission related to the sale of the New Mexico stations.
If the cash is returned to the company the next two years this could add $0.08/share in value. We have to wait till Friday for the latest quarterly report, so it’s unknown how much cash will remain on the balance sheet after the dividend payment. It’s not yet totally clear if I’m going to achieve the return I wished, but there is at least zero downside anymore. My average cost for my ACME position ended up at exactly $0.92962/share, so I got that covered with the $0.93/share dividend.