(Updated.) Gannett's shares closed at $6.81 this afternoon -- down 97 cents, or 12.5%, as stock markets overall tanked on renewed investor worries about the economy. The widely watched S&P-500 Index also fell, but by only half GCI's rate.Gannett's dividend yield has now climbed to a jaw-dropping 23%, while the company's market value has slipped to $1.6 billion.
[Image: Google Finance]
Why is that so jaw dropping? What essentially it means is that people with money want a risk premium on GCI's survival, and that risk is now a 25 percent rate. If GCI goes into bankruptcy next year, I have lost all my investment money except for the dividend I got. Gracia said in a recent conference call that the dividend GCI is paying doesn't justify that stock range. The stock has gone down further in the weeks since. People scoff at the idea GCI could go bankrupt, but run an Altman Z score on the company, and you will see how vulnerable and crippled it really is.
ReplyDeleteMake that $6.81 per share.
ReplyDeleteFrom today:
ReplyDeleteCramer also addressed the yields of New York Times(NYT Quote - Cramer on NYT - Stock Picks), which pays a 13% dividend, and Gannett(GCI Quote - Cramer on GCI - Stock Picks), which pays close to 22%. "I don't know," said Cramer. "When I start seeing dividends of 22%, it raises eyebrows."
I hate to be pessimistic, but I think it's going down for the count. At what point should we all be warned to watch for Gannett's top people looting the company as it tumbles into bankruptcy?
ReplyDelete7:43pm, isn't the company being looted right now? Look at the salaries of the clowns in Virgnia, especially DB.
ReplyDeleteBankrupt? Look at our balance sheet. We are not near that point yet.
ReplyDelete2:45 If you are using earnings you need to back out that 3 billion dollar good will writedown. That is not real earnings but just an accounting and tax issue.
ReplyDelete2:45.......What did the AltZ score come out to?
ReplyDeleteMarket cap of $1.6 billion.
ReplyDelete30,000 employees.
So, if we all pony up $53,333 each, can we buy the company?
10:52 pm: 30,000 is the approximate employment in the newspaper division. Company-wide, Gannett has closer to 40,000 employees.
ReplyDeleteAlso, at today's closing price, the company's market value is $1.4 billion. So, $1.4 billion/40,000 employees equals $35,000 each!