Continuing their steep decline, Gannett's shares closed at $10.67 this afternoon -- down 70 cents, or 6.2% -- as the No. 1 newspaper publisher once more bucked an overall rise in the stock market. The widely watched Dow Jones Industrial Average, for example, surged 401 points, or 4.7%.Gannett's stock yield is now an unlikely-to-be-sustained 15%, renewing pressure on CEO Craig Dubow to cut the dividend during the board of directors' expected meeting next week. Such a move would be a big concession that Dubow's strategic plan is failing.
Earlier: Stock price junkies now have their widget
Dubow has more than 10,000 reasons not to cut the dividend -- he gets $15,000 this year from dividends on his personal investments. He's not going to take that sort of pay cut when he can squeeze more money out of operations.
ReplyDeleteActually, that's probably not a big motivator for him. SEC records show Dubow loaded up on GCI in late February, buying 13,545 shares at $32.30. At today's value, those same shares are worth $144,931 -- a drop of $292,572 -- OUCH! But that doesn't include a far larger number of additional shares from stock options, grants and other benefits. Jim, how about a closer look?
ReplyDeleteI'll reiterate what I said yesterday. Reality is setting in for Gannett. The huge conglomerate we know today will not exist much longer. With stock at around $10 or even lower, someone will buy up GCI and systematically dispose of the the parts, keeping those that make sense.
ReplyDeleteDon't think it'll happen? The reality is that it may be the only escape for the company at this point. They are past critical mass - resultant from years of failed policies and leadership. Now they're simply in the reactive death throes.
DUBOW makes $145,000 Per Week Pay!!!
ReplyDeleteHe could give a shit about the dividend.
The Company's Break-Up Value (AFTER DEBT) is very very LOW.
ReplyDeleteRevenue (ad & circ) IMPLOSION + Expense EXPLOSION = NO PROFIT
NO PROFIT no money to pay INTEREST on DEBT, EMPLOYESS, SUPPLIERS, EMPLOYEES.
Home Delivery Carriers are getting ready to jump ship after Christmas Tips....those poor bastards haven't gotten an increase in pay in 10+years.
Watch CITIZEN KANE.....Papers do close!
why those retarded board members still keep the Retard CEO?
ReplyDelete"Quote" Home Delivery Carriers are getting ready to jump ship after Christmas Tips....those poor bastards haven't gotten an increase in pay in 10+years. "Unquote"
ReplyDeleteNo wonder their cars never have mufflers and wake up everyone on the street.
Come oooooooooon stock... drop below 10 please! You can do it! If Gannett stock drops below 10, I think that's the lowest EVER! Poooooor managers who have all their bonus money in worthless Gannett stock!
ReplyDelete"Impossible-to-sustain" dividend? There is no direct relationship between a stock price and a dividend. There is a direct relationship between *profitability* and a dividend, and on that basis this dividend might be impossible to sustain, but sometimes stock prices go out of whack with reality.
ReplyDeleteDespite Gannett's woes, there is no rationality in its stock price any more (hardly a rare thing in this current market). The recent drops make it look like the short-sellers are just playing with the stock now.
The thing that makes Gannett different than most/all of its peers is that it isn't overloaded with the kind of debt that faces many of them. This is still a crappy business -- perhaps it's fair to say that Gannett has done the 'least worst' in this market -- but the constant drumbeat here that this is all because of stupid management is just naive.
Let's hope those GCI McLean execs are sweating bullets now - has anyone taken out the lifeboats yet?
ReplyDelete2:29 is correct. There's no direct relationship between stock price and dividend. As price goes down, the effective dividend yield for any given dividend amount increases. But low stock prices don't "cause" dividend cuts. The market generally lowers dividend yields all by itself. Because when investors see a huge yield like Gannett's they pile into the stock in order to enjoy the big dividend yield now and the possibility of capital gains later on. Investors who do this conclude that a stock with a huge dividend yield is "oversold." Whether you believe Gannett stock is oversold or not depends upon whether, and to what extent, you believe the ship can be righted to restore profitability. Right now, given the dispy doodle overall stock market, it's tough to tell what the market thinks about GCI. But it's probably safe to say the market is not a believer. It's worth noting that, according to Reuters, Gannett has a "current ratio" of 1.85, which is an indicator that the company has plenty of cash flow to pay its debt. Which usually means the dividend is safe, because corporate boards hate to cut dividends.
ReplyDeletehttp://en.wikipedia.org/wiki/Current_ratio
I would be a buyer < $9. Hell, if it just goes back to 18, money has doubled.
ReplyDeleteI've been leaving my 401(k) match in stock for the last few months. Break up, purchase, recovery or sell off, the real estate the company holds, the presses that are paid for, the broadcast licenses we control - that's all worth real money to someone. If I'm wrong, I'm not losing much at this point. But the upside could be sweet.
ReplyDeleteToday the best advice on CNBC was buy stocks with consistent dividends. so GCI will probably rally on that fact alone. Besides, all stocks are going to all time lows. Just ride it for a while.
ReplyDelete3:28 --
ReplyDeleteA current P/E ratio (price vs. earnings) of 1.85 is atrocious. Go pop open a business book; an average P/E ratio (current) is probably around 15. I'd disagree on the dividend price comments as well. I'd say their importance is inversely related. Investors need to get something out of a stock, and if it's not normal, market-driven gains, at least they get the qtrly dividend payments when the price goes down.
The biggest reasons the stock is going down is (1) that revenue is driven by the health of the economy as represented by ad spending by businesses, and it ain't lookin good; (2) continuing double digit year over year losses in profit. Wall Street is hip to the fact that GCI will not cut/save its way back to good health. Simple as that.
7:30 I think you're confusing two different things. The P/E ratio and the current ratio are very different things. The P/E ration, in essence, answers the question, "How many dollars do I have to spend to get a dollar of earnings?" The current ratio measures how well the company is positioned to meet its credit obligations. Full explanation here:
ReplyDeletehttp://en.wikipedia.org/wiki/Current_ratio
I'm thinking a target stock price of $5-6.00 sounds possible once all the political ads are done and the very poor seasonal reports are announced. I'm sure there will be another wave (s) of layoffs in place of a true plan as management has no other options (and no other ideas). I feel sorry for the poor people still with the company picking up the slack of those let go with what appears to be no hope. Pending layoffs is all that appears to be in the future. Has anybody heard of a plan that sounds hopeful and doesn't include layoffs?
ReplyDelete