Urban One Inc [NASDAQ: UONE] has been on a downtrend for the past month. However, it seems to have found some support at around $4 and has bounced off this price level. If it holds, the stock could see an increase in buying momentum as investors move in to take positions. This is already showing in its price action today when the stock is up by 6%. However, there are other factors likely to drive this stock’s price action beside the technical price action. Some of the factors likely to drive up momentum in this stock are as below:
- Increased interest in black-owned businesses
Over the last few months, there has been an increase in interest in black-owned businesses. This interest is unlikely to drop any time soon. In fact, due to the ongoing racial issues in the U.S, such businesses are likely to keep gaining more interest in the near-term. Urban One Inc is one of the black businesses that stand to gain the most from the growing interest in black businesses.
The company stands to benefit in two ways. First, it is well-positioned to attract investors who want to invest in black businesses. The company runs 61 broadcast stations that are all targeted at the black community. This makes it one of the best businesses for an investor that wants to invest in a business that has an impact on the business community.
Secondly, the business offers a window of opportunity for investors looking to target the black community for different empowerment programs. This could see the number of advertisements rise, and as a consequence, drive up its revenues and intrinsic value. Both of these factors could see the value of this stock grow in value in the foreseeable future.
- The company is recapitalizing
Recently, Urban One Inc announced that it was undertaking an equity offering to raise $25 million. The company intends to do this by issuing class A shares. The company has stated that it intends to use the money for repaying debts, and for general company purposes. With this recapitalization, the company is well-positioned to grow in value in the near-term. That’s because, when the company gets out of debt, it will have the liquidity to invest in new growth opportunities.
The company will also be in a position to navigate better through tough economic times and that adds to its intrinsic value.
About Urban One Inc
Urban One Inc is the largest media company targeting the black community in the U.S. Through its media outlets, the company reaches more than 59 million households. It is based in Silver Spring, Maryland.