High-Frequency Profits

See how Radio One Inc. has soared by inviting shareholders to tune in

Clang-clang! Clang-clang! When the stock

market opened to the sound of the bell Thursday morning, May 6, 1999, Catherine Liggins Hughes breathed a deep sigh of relief. That day marked the end of an era for her 20-year-old business, Radio One Inc.-the company she had nurtured from a single-station start-up to a burgeoning broadcasting enterprise. A divorce from Dewey Hughes, her husband and the company’s co-founder, had left her holding the bag a few years into the business. But, without missing a beat, she fearlessly stepped up to take sole responsibility for the company. The fact that she had little idea what she was doing didn’t stop her.

“I was an experienced broadcaster. I knew how to draw an audience, and I knew how to sell advertising,” says Hughes, referring to her five-year tenure at Howard University’s WHUR-FM. “But I knew nothing about being a broadcast entrepreneur.”

She realized this when she had to convince Herb Wilkins and Terry Jones, two principals at Syndicated Communications Inc. (Syncom)-the venture-capital firm that would become one of Radio One’s most important business allies-to give her more money to expand.

“Wilkins asked me for my business plan. I said, ‘My plan is to become successful in business.’ He fell out laughing. I was embarrassed and intimidated, but I was determined to learn.”

And learn she did. The company’s impressive premiere on the Nasdaq last year was proof positive of that. Hughes had finally fulfilled her decade-long dream of taking the company public, getting out of debt and reaching the next level. “It was the first time in my 20 years I was going to be able to pay off all of Radio One’s bills at once,” she recalls with pride. “Debt is a stressful, overbearing and oppressive master, and I was glad to be getting out from under it.”

It’s not every day that a mom-and-pop enterprise-especially one in the cutthroat, multibillion-dollar broadcast radio industry-steps out of familiar, local terrain to try its hand at the big leagues. Just

securing the financial means necessary to take a company public is a battle that few win. For a black company, making the leap from

privately owned to publicly held is an even rarer occurrence. But every once in a while, you’ll hear of one that does dare to venture out into IPO territory and stake its claim to the rewards-and challenges-of seeing its name on the Nasdaq board.

Radio One Inc. has proved to be one of those rare birds. It announced an initial public offering of 6.5 million shares of Class A Common Stock at $24 a share in May 1999. In one year, it has grown its revenues from $65 million to $93.3 million, an increase of nearly 70%. Not a bad return on the $1.55 million loan Hughes and her husband had secured to launch the business 20 years ago. With her son, Alfred C. Liggins III, overseeing the day-to-day operations of the company as president and CEO, Cathy Hughes, 52, has passed the torch to the next generation-ensuring that

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