It's tempting to shrug off the recent decline in Gannett's stock as simply a reflection of the broader stock market tumult. But that's wrong.The chart, above, illustrates what I'm talking about. It compares the path of the S&P-500 Index (blue line) and GCI shares (red) since Oct. 11, when the S&P hit its last record high: 1576.09. Since then, the index has fallen 5.2% amid worries over sub-prime credit problems, tumbling consumer confidence and the specter of an economic slowdown next year. (Unlike the better-known Dow Jones average of 30 industrials, the S&P tracks a more diverse group of 500 companies.)
GCI shares fell, too -- but much, much harder: nearly 19% since Oct. 11, based on yesterday's closing price of $36.75 a share. Wall Street investors are sending a message to Gannett's top brass: We do not believe the strategic plan is working. We're dumping Gannett shares because we're pessimistic about the company's prospects -- not just because of broader worries about the economy's direction.
What's going to make Wall Street happy? The breakup of Gannett into several companies. More on that Monday.
[Data: Google Finance]
Good tease. GCI has already said they wouldn't break-up broadcast from newspapers (ala Belo, Scripps).
ReplyDeleteGCI use to say that newspapers would should be autonomous in operations and choice of content. Now, operations are being consolidated and content choices are dictated. Could the leaders of any paper stand up and refuse based on the community needs and preferences? Sure... and then they were replaced with puppet-like leaders who would comply with GCI mandates.
ReplyDeleteAs far as GCI is concerned, saying and doing are not the same things.