Updated. Gannett's stock closed moments ago at $12.50 a share -- down 37 cents, or 2.9% -- on a highly anticipated day of global market trading where the Dow Jones Industrial Average and other closely watched indexes rocketed higher.The Dow, for one, jumped more than 900 points, or 11%, as Wall Street stormed back from last week's devastating losses, the Associated Press says, "sending the Dow Jones industrials soaring a nearly inconceivable 936 points after major governments' plans to support the global banking system reassured distraught investors."
GCI's tumble followed a wild day Friday, when the company's shares traded as low as $11.92. In a fresh comment, a reader says today's fall is "very troubling'' for Gannett.
"I was always one to believe it would lead the sector back because absent any other skills, these folks know how to turn a buck,'' Anonymous@3:27 p.m. wrote, as trading's end neared. "The market is up by the most points in its history and GCI is down a robust 4%. How long will the big investors tolerate it? Although this is largely a financials-driven rally from an infusion of government and foreign cheese, I was hoping that GCI would catch the coattails of something. Anything?"
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Most of the newspapers in the sector are down this morning. Exceptions are NYT and WaPo. Very discouraging considering the market is up overall.
ReplyDeleteThis to me is a very troubling day for GCI. I was always one to believe it would lead the sector back because absent any other skills, these folks know how to turn a buck. The market is up by the most points in its history and GCI is down a robust 4 percent. How long will the big investors tolerate it? Although this is largely a financials driven rally from an infusion of government and foreign cheese, I was hoping that GCI would catch the coattails of something. Anything?
ReplyDeleteThe market is sending corporate a message: explain why you took that $1.2 billion loan. There has been silence from McLean on what the reason for that expensive long-term loan was. You may have noticed how cheap credit has become in the last week, and if GCI had waited, they could have got a much better rate that would have cost more.
ReplyDeleteI suspect that GCI will unveil the reasons in their Q3 report later this month, which is going to be devastating. It is baked in the numbers now that it will be down, and then there's that $1.2 billion loan again.
The company has become unstable, and Wall Street doesn't like instability, so the stock plummeted when 95 percent of the stocks on the NYSE were up solidly Monday. On the corrections, GCI collapses, and on the rallies it collapses. Corporate doesn't know where it is going.
Anyone else note that Amazon.com has paid off its $1.25 billion debt, just in time for the recession. Amazon's debt almost brought the company to collapse in 2000, but it is now debt-free. GCI was debt-free, but now encumbered by a $1.2 billion debt. That is the reason GCI fell today, and Amazon soared.
ReplyDeleteGCI has a forward P/E of 4.1, a forward dividend yield of 12.1 percent and a seemingly solid current ratio (a measure of a company's ability to pay its debt)of 1.6 (>1.0 is okay/good). But even with those seemingly good "metrics" (as the CNBC dudes are wont to say) GCI is down on an up day like no other.
ReplyDeleteI don't know whether Gannett is "unstable" as the previous poster said. But clearly Wall Street isn't a believer and has priced the stock accordingly, fire-sale fashion. Kinda makes you wonder just how ugly things might get when they report Q3 earnings on Oct. 24.
Disclosure: I am neither long nor short GCI and, in fact, never have been.
I don't and wouldn't own GCI, but be careful with those stats the MSN, Yahoo Finance and CNBC publish. They are often drawn from the annual report, and don't reflect current realities. I find errors in them all of the time, but no one really seems to care about correcting them (ever try to make a complaint to Yahoo Finance?). The stats give a pix of a company at a point in time, which is useful to judge a company's performance only in a very general way.
ReplyDelete