What Smart Money Is Doing With PodcastOne's Adam Carolla Deal

The news is straightforward. PodcastOne announced a multi-year renewal for Adam Carolla's show, a top-tier podcast that just hit 4,000 episodes and has over 700 million downloads. For a company that relies on a stable of hit shows, this is a positive operational update. It secures a major asset and adds SiriusXM distribution, which should help grow the audience further.

But the smart money's reaction tells a different story. The deal was announced on January 15th. By the time the news hit, the stock was already trading at $2.61, near its 52-week high of $2.94. That's a critical detail. When a stock is this close to its peak, it often means the good news is already priced in. The market has likely discounted the renewal as a given, not a surprise catalyst.

More telling is the behavior of insiders. The CEO, Kit Gray, has been selling. His last reported sale was on November 26th at $2.47 per share. That was before the deal news, and it was at a price below today's level. More broadly, the company's director, Jonathan Merriman, has been buying shares at a discount to the current price, but there's been no flurry of insider buying around this specific announcement. The lack of skin in the game from the top down suggests they don't see a near-term pop coming from this news.

The bottom line is that the deal is a solid business move, but it's not a signal to buy the stock now. The smart money is waiting for a better entry point, or perhaps seeing the current price as a trap for those chasing headlines.

Insider Skin in the Game: Who's Buying, Who's Selling?

The real signal isn't in the press release; it's in the filings. For all the talk of securing a top podcast, the insider trades tell a story of selective conviction and caution.

Director Jonathan Merriman has been the most active buyer. His most recent purchase, on December 16th, was at $2.08 per share. That's a solid entry point, especially compared to the stock's 52-week low of $1.28. But the size and timing matter. These are relatively small buys, and they haven't kept pace with the stock's climb. Merriman's purchases have been concentrated in the $1.46 to $2.47 range, a period when the stock was still finding its footing. He hasn't made a reported purchase in the last 90 days, only sales. His buying was a vote of confidence at lower prices, not a bet on the current rally.

The bigger picture is one of minimal insider accumulation. While Merriman bought, the CEO and other officers have been net sellers. Kit Gray, the President, has not made a single reported purchase in the last 90 days. His last sale was at $2.47 per share, a price below today's level. Other officers have also been selling. This is the classic sign of a lack of alignment. When the people running the company are taking money off the table, it often means they see limited near-term upside from the latest news.

The bottom line is that the smart money isn't chasing the Adam Carolla headline. Merriman's past buying shows he has skin in the game, but his recent inactivity and the CEO's sales suggest insiders believe the stock is fairly valued or even overvalued at current levels. For a trader, that's a red flag. When insiders are selling while the company is hyping a deal, it's a setup that often leads to a pause, not a pop.

Financial Health vs. Market Perception

The company's fundamentals are improving, but the market is treating them with deep skepticism. PodcastOne just reported a record Q2 revenue of $15.2 million, a 22% year-over-year jump. Management has raised its full-year revenue guidance to a record $56-60 million. This is solid operational momentum. Yet the stock's valuation tells a different story.

The market's verdict is clear in the numbers. PodcastOne trades at a negative P/E of -12.61. That's not a valuation discount; it's a reflection of the market's doubt about the company's path to sustained profitability. The stock is pricing in the future, not the present. For all the revenue growth, investors are looking past the top line and focusing on the bottom line, which remains in the red.

This skepticism is mirrored in the trading activity. The stock's volume is practically nonexistent. Current volume is 0, compared to an average daily volume of 90.1K shares. This thin trading is a classic sign of a speculative, low-liquidity stock. It means there's little institutional accumulation and few active traders. The market is not voting with its money; it's waiting to see if the promised profitability ever arrives.

The bottom line is a stark disconnect. The company is executing on its business plan, hitting record revenue and raising guidance. But the smart money isn't buying the stock. The negative P/E and the ghostly trading volume show that the market sees the financial health as a work in progress, not a reason to buy. For now, the financials are the story, but the stock price is a bet on a future that hasn't arrived.

Catalysts and Risks: What to Watch

The setup is clear. The smart money has been selling while the company hyped the Adam Carolla deal. Now, the market is waiting for confirmation. The next few months will be defined by a handful of key signals that will either validate the exit or force a re-evaluation.

First, watch for any significant insider buying in the next earnings report, expected in March 2026. The current pattern of minimal accumulation is a red flag. A surge of insider purchases around that filing would be a powerful signal that the company's leadership sees a disconnect between the stock price and the underlying business. It would suggest they believe the raised guidance and the Carolla renewal are undervalued. But if the filings show more sales, or just silence, it confirms the lack of skin in the game. The March report is the next major data point where the smart money's true conviction-or lack thereof-will be on display.

The second risk is the stock's extreme thinness. With a current volume of zero and an average daily volume of just 90,100 shares, this is a whale wallet waiting to be dumped. The stock's vulnerability to a sharp drop if the smart money continues to sell cannot be overstated. In a low-liquidity stock, even a modest sell-off by a few large holders can trigger panic and a cascade of selling. The recent climb to near its 52-week high makes this setup even more precarious. The market is pricing in perfection; any stumble in execution could see the stock fall quickly from here.

Finally, monitor the actual performance of the Carolla show on SiriusXM. The deal is a distribution win, but the raised revenue guidance of $56-60 million for the year is the real test. The smart money isn't buying the headline; they're betting the company can convert this new audience into ad dollars. The first few quarters of data on how the SiriusXM rollout impacts listener growth and ad revenue will be critical. If the numbers start to lag the guidance, it will validate the market's skepticism and likely accelerate the exit. If they beat expectations, it could force a re-rating. For now, the performance of that 4,000-episode library on a major platform is the only catalyst that might change the smart money's mind.