Updated at 1:26 p.m. ET, Oct. 2. Regarding suggestions that employees sell Gannett shares in their 401(k) retirement account as quickly as prudent, Anonymous@5:28 p.m. wrote a smart analysis in yesterday's Real Time Comments. "The people here who recommend getting out of the discounted or free Gannett stock you get or are forced to buy as part of a retirement plan are giving very good advice,'' they wrote in a comment worth reading in full. "I feel some sympathy for the many fine journalists within Gannett (and yes, there are many) who may have big chunks of their retirement in Gannett stock. While Gannett will have future quarters of earnings growth some day, it will only be because the numbers have come down to where they can handle them. The true growth story of the 80s and 90s here is over. Companies grow because they create VALUE for customers, and Gannett has never been about creating value for customers. Gannett is about creating value for SHAREHOLDERS (not customers) by cutting costs. You can only do it so much and for so long."In an appendage, Anonymous@11:59 a.m. said yesterday: "I am the person who wrote the hideously long post on Tuesday that Jim has quoted from here. In fairness to the company I would like to amend my post in one particular. When I wrote that Gannett was not about creating value for customers in the true capitalist sense I should have noted one big exception--USA Today. "Whether you like the company or USAT, or dislike one or both, it should be said that USAT was an innovative new product that created value for customers. But, with that exception noted, I stick by my argument."
Related: GCI's stock is now trading around $16.39 a share, down 3%.
Join the debate, in the original post.
The wise guy in me says don't ever buy a stock that explodes out of Rochester, NY. (See Xerox, Kodak and Gannett)
ReplyDeleteAll of these were high growth, monopolistic companies whose business model was overtaken by newer technologies.
If you were in these early on and got out in the late 1990s, you are rich.
Now, not so much.
I am the person who wrote the hideously long post on Tuesday that Jim has quoted from here. In fairness to the company I would like to amend my post in one particular. When I wrote that Gannett was not about creating value for customers in the true capitalist sense I should have noted one big exception--USA Today.
ReplyDeleteWhether you like the company or USAT, or dislike one or both, it should be said that USAT was an innovative new product that created value for customers. But, with that exception noted, I stick by my argument.
The advice is time-tested and clearly wise given trends in the last few years. I had a nest egg of maybe $7,000 in employee purchase stock that became a small fraction after waiting the required period for a lower tax rate. Now it's a write-off only. My only note of caution is that as soon as a stock strategy becomes obvious, like buying tech in the 90's, it almost immediately becomes wrong.
ReplyDelete11:59 am:
ReplyDeleteThe awful legacy of the situation you described is that in order to succeed, you had to cut costs.
Bob Collins became the exec you had to model to move up the food chain.
After decades of this, the company is run by people who really, really know how to cut costs.
They can't develop new products, new customers, and new revenue, however.
By all rights, we should go on a huge buying binge then - there should be plenty of properties out there for bargain basement pricing that we could Gannettize, leverage the strengths, consolidate the overlap, etc.
ReplyDeleteI personally do not see it going much lower. I have 400 shares. Whether it tanks or not is immaterial to my financial future. GCI has learned, painfully, it is a lot harder to be a market bully in cyberspace than in a SMSA.
ReplyDeleteIt's my practice to dump my Gannett 401k stock the Monday after it is credited to my account. It would make more sense and save money for Gannett if the firm let workers chose where the Gannett contribution went instead of having to pay the transactions fees etc ... when I sell Gannett stock for anything but.
ReplyDeleteis anyoe else having trouble making online transfers out of gannett? when i try to move mine, either with percentage or amount, i get a note that says i can't do that and call the benfits number. not much help at this time of night.
ReplyDelete9:06, you're right
Here's a good rule of thumb from an economic standpoint -- diversify. Do you want all income streams (present and future) coming from the same source....i.e. GCI? As a poster wrote, move the GCI contribution out of their stock the minute you can, period.
ReplyDelete