BBGI is a scam. You must read the 10-k.

tl;dr scammy related third party transactions. 

I made a YouTube video about this. You don't need to watch it because everything is covered in the article. 

Welcome back stonkers.

We all love investing. Some love investing in hyped spacs. Some love investing in overvalued tech stocks with p/s = 60. Whatever it is, we all "invest" in hopes of making money. 

BBGI is a scam. Beasley broadcast group, a radio station company. And you won't know if you never read the 10-k. The financials look good, that's what brought me into the stock. I found it on finviz.com. 

This article will illustrate why you must read the 10-k (annual report.)

Some key things to note. I will tell you the important things. Everything is provided proof in the footnotes. 

• Essentially this is a company that makes money by advertising on their radio stations. Figure 1. Page 4. 
• It is run by a family. Insider owns 60% of the voting control. He controls the company. ***key metric. Figure 2. Page 17.
• Main part: BBGI invested $1.3 million into Digital PowerRadio LLC, a company owned by Mark Fowler, a director of BBGI. The company dissolved itself, the patents are useless. December 2019 BBGI wrote it off as a loss. This is screaming conflict of interest. Figure 4. Page 54. 
• Main part: BBGI sells towers and radio stations to the Beasley private LLC. Then leases it back for ludicrous valuations: figure 5. Page 18. See "related third party lease." 
• They sold radio station in Charlotte, NC to private LLC for $400,000. Leased it back for $100,000/yr. Lease expires in 2025! They make their money back! Figure 6. Page 54. 
• They claim that the terms are as favorable as getting it from a third party. Bullshit!!!! Figure 7. Page 29. 
• They rent their principal executive office from private LLC for $200,000/yr. Figure 8. Page 53. 
• They lease a tower for 19 radio stations for $400,000/yr. Figure 9. Page 54. 
• They lease property for radio stations from private LLC for $200,00 yr. Lease expires 2024. Juicy cash flow. Figure 10. Page 54. 
• They lease towers for one radio station in Tampa, FL, from private LLC for $31,000 yr. Lease expires 2025. Figure 11. Page 54. 
• They lease towers for two radio stations from private LLC until 2038! Rental expense in 2018 is $100,000/yr. Rental expense in 2019 is $200,000/yr. They increased it by $100,000 wtf. Figure 12. Page 53.
• Their third party lease with an unknown party is so much cheaper. only $13,000 for 2018 and $11,000 for 2019. Figure 13. Page 54. 
• BBGI leases several towers for one radio station in Boca Ration, FL. Rental expense $100,000/yr. They sold it to private LLC in 2006. Milking the cow. Figure 14. Page 54.
• BBGI leases land from private LLC for $45,000/year. Lease expires 2023. Figure 15. Page 54.
• BBGI leases property in Lase Vegas from private LLC for $200,000/yr until 2023. Figure 16. Page 54.

In summary:

BBGI sells land, tower, radio stations to its private LLC and rents it back at ludicrous rates, all the while locking in long expirations. They get their money back. Look at the examples above. There is one incident where BBGI dumped $1.3 million into a related company owned by the director of BBGI and immediately wrote it off as a loss. Something is very wrong. Hidden behind closed doors.

This is a microcap: market cap is $58M as time of writing (Jan 19 2021). Often this microcaps have no coverage by analysts. That is why it is essential you must do your research. This information cannot be found online-- I searched! Some people posted about it on SeekingAlpha-- check it out it's a free website where writers post their thoughts/articles about companies. Applies to all companies. 

Insider are milking this company. That's why you must the 10k.

Peace out stonkers. - stonk slayd

footnotes:

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