GCI announced the news after stock markets closed, so today is the first chance for investors to vote -- with their wallets. Yesterday, in after-hours trading, Gannett sold for $3.52, down 6%. In regular trading, shares closed at $3.75, down 8.1% -- adding to losses since Jan. 30, when the company first disclosed a dividend reduction was likely; GCI has fallen 46% since then.In a statement yesterday, Chairman and CEO Craig Dubow said: "Today's action by the Board is another prudent response to the full-fledged recessions in the U.S. and UK and the continuing difficulties in the credit markets."
Dubow's statement continues: "The reallocation of more than $325 million of free cash flow annually to pay down debt will further strengthen our balance sheet, provide us with even more financial flexibility and position us well to continue to seize opportunities for growth. This dividend represents the 163rd consecutive dividend paid by the company since 1967."
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I agree with you!
ReplyDeleteOops, that first graf probably should say $325 million.
ReplyDeleteGood catch, 1:01 am!
ReplyDeleteThe part that worries me is:
ReplyDelete"strengthen our balance sheet, provide us with even more financial flexibility and position us well to continue to seize opportunities for growth.
If that means restoring manpower for a better product, Whoopee!
If that means they're going to buy something big and costly, I'd rather they paid down their debt first.
If they seize opportunities for growth, they will certainly kill them. It's the Gannett way.
ReplyDeleteGCI is up 1.3% as of this writing, trailing this morning's market bump by a couple of tenths.
ReplyDeleteThere is a very strong case to be made that a slashed dividend was already priced into this stock. There's not much reaction at all.