What Happened:

Shares of global media and entertainment company iHeartMedia (NASDAQ:IHRT) fell 30.2% in the afternoon session after the company reported first-quarter results. Its operating margin missed and its revenue fell short of Wall Street's estimates. Sales declined by $12.2 million (-1.5% y/y) due to a decrease in broadcast advertising given uncertain market conditions. Free cash flow also turned negative. On top of that, next quarter's revenue guidance fell short. Overall, this was a bad quarter for iHeartMedia.

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What is the market telling us:

iHeartMedia's shares are quite volatile and over the last year have had 78 moves greater than 5%. But moves this big are very rare even for iHeartMedia and that is indicating to us that this news had a significant impact on the market's perception of the business.

iHeartMedia is down 39.4% since the beginning of the year, and at $1.48 per share it is trading 68.8% below its 52-week high of $4.73 from July 2023. Investors who bought $1,000 worth of iHeartMedia's shares 5 years ago would now be looking at an investment worth $84.86.

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