The board: Starting at top row, left to right, with compensation committee members in boldface: Dubow, Elias, Harper, Louis, Magner, McCune, McFarland, Shalala, Shapiro and Williams.-- based on yesterday's closing price: $4.19, down 7.7%. We await a crucial board of directors meeting this month, where the payout could be cut, to avert a worsening liquidity crisis and Chapter 11 filing.
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For 40 years, the board of directors of Gannett Corporation have maintained or increased the dividend. I do not believe this board will turn their back on this historical record and cut. I will send $5 to Jim as a bet if I am wrong.
ReplyDeleteQuestion... If Gannett pays out the full dividend, it reduces Gannett's cash reserves? Then what does that do to the company as a whole?
ReplyDeleteI readily admit to being kind of a dummy when it comes to finance. My question is essentially echoing Anon 9:42.
ReplyDeleteIf the yield is +/- 38% does that mean 38% of the company's cash goes out the door when the pay the stockholders' dividends? Somehow that doesn't seem right.
Jim, you're just irresponsible to raise the specter of a bankruptcy filing. You have no evidence that Gannett is even close to a liquidity issue. In fact, your position seems to be that Gannett is making too much profit and shouldn't be laying people off -- that's not the sign of a company with debt problems. It is irresponsible and cruel to all of the hardworking people worried about their jobs for you to assert, on the basis of nothing, that Gannett has a bankruptcy issue. Surely you learned enough as a business reporter to know this. If there's evidence of it, okay. But if you're just speculating, please save all of us the pain of having yet another item for the worry list.
ReplyDelete"Anonymous said...
ReplyDeleteQuestion... If Gannett pays out the full dividend, it reduces Gannett's cash reserves? Then what does that do to the company as a whole?
2/14/2009 9:42 AM"
Despite moral or ethical considerations to the contrary -- considerations to which GCI brass has never been receptive -- the company's overwhelming legal obligation is to provide value for shareholders. If they decide that the greatest value comes from paying the dividend and liquidating the company, that's what they'll do.
If Gannett pays out an existing level of dividends off dramatically dwindling revenues, it will do so by tapping cash reserves (no idea what those are right now). Less cash in the bank for GCI means the same thing that it does for your family: rethinking spending priorities, especially given the company's increased costs of borrowing. The result could be more assets sold, more jobs cut, or anything else that bolsters money coming in the door.
One thing you won't see, though, is greater attention to customer needs, staffing concerns or other investment-oriented thinking (other than acquisitions which will improve cash flow, or further enrich corporate officers). That would require some measure of leadership, and this company has absolutely none to spare.
I've asked before, but does anyone have any of the email addresses of our illustrious directors? They have a fiduciary responsibility to shareholders - which includes us because we own the stock
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