Entercom late Friday announced it would dramatically slash the quarterly dividend it pays to shareholders, from 9 cents per share to just 2 cents, and reinvest the roughly $39 million in annual capital freed up to buy back stock and speed up deleveraging. Investors frowned on the move, pushing the company’s stock down 14% in after-hours trading, after a tumultuous week that saw the stock slide 36% on Wednesday.

The 2 cents per share dividend will be payable on Sept. 13 to shareholders of record as of Aug. 29. It marks a reduction of 7 cents per share from the company’s previous quarterly dividend.

“We believe that redeploying capital from dividends to both share buybacks and debt reduction will allow us to drive increased shareholder value given our belief that our stock is now trading significantly below its intrinsic value and because this action will allow us to accelerate progress on our commitment to reduce total net leverage to four times,” David Field, Chairman, President and CEO, said in a statement issued Friday evening after the market closed. At that point Entercom stock was up 3% to $3.54 per share. But the surprising announcement of the dividend cut triggered a double-digit decline in after-hours trading.

The decision to slash the dividend by 78% is rooted in the belief by the company that its stock is trading far below its fair market value and that the deep discount offers an opportunity for the company to buy back shares and reduce its leverage ratio. On its earnings call with investors last week, Field closed his opening remarks by saying, “We see our stock valuation as a complete disconnect from where we see the business and the strength of our platform and assets and capabilities, and the opportunities for growth and value creation that we believe lie in front of us.” Among the metrics the company points to are a 3% increase in Q2 revenues (minus political) and a 7% increase in EBITDA, a measure of cash flow.

The dividend announcement capped off a turbulent week for radio’s second largest company. On Wednesday morning it reported Q2 revenues rose 2.3%, lower than the 4% the company projected three months earlier. Wall Street punished the company, sending its stock price down a blistering 36% to close at $3.36 on Wednesday, causing it to lose more than one-third of its value in a single day.