[Shares staged a recovery beginning at 11 a.m. ET]
Gannett's stock closed moments ago at $4.08 a share, up more than 11%, Google Finance says, as overall markets rallied on investor optimism. Earlier in the day, GCI had traded as low as $3.50. Any announcement regarding news from the board of directors meeting presumably underway would come while markets are closed.
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The market opened higher and Gannett opened lower.
ReplyDeleteThat just made my day.
Newspapers Still Make Money; Debt-Laden Owners Don't
ReplyDeleteAdvertising Age
Even as they suffer from the recession and digital media, newspapers still earn decent profits, especially papers outside of big cities. Publicly owned newspapers averaged an operating profit of 10.8% in the first three quarters 2008, says industry analyst John Morton.
Newspaper owners, on the other hand, are posting huge losses and struggling to make payments on debt they took on under projections that didn't pan out. But that's no reason for newspapers to stop the presses.
2 bucks! 2 bucks! 2 bucks! 2 bucks!
ReplyDeleteup 3%! woohoo!!
ReplyDeleteup 9.56% boys and girls. can you feel the wave back to $5. $6 on no dividend cut?
ReplyDeleteWow. Up 12 percent at 2 p.m. Does this mean no dividend cut?
ReplyDeleteIt's probably rising in anticipation of a cut. If at the end of the meeting there is no cut, watch it rocket back down.
ReplyDeleteI know lots of people would just get in the stock if the diviend is not cut even if it is only for the next 3 weeks or so until the x-date? It is paying over 10% for this x dates.
ReplyDelete2:35 pm: Actually, it's an inverse relationship:
ReplyDeleteStock falls as chances rise that dividend will be cut, because the shares would be worth less.
The stock rises as chances fall that dividend will be cut because the stock will be worth more.
Not necessarily. With current credit and liquidity issues more important than almost anything else, stock is more likely to rise with dividend cut (see JP Morgan yesterday and today-dividend cut of 86% and sharp stock rise) as investors hold more favorable view of GCI liquidity and ability to withstand sharp economic decline. At the moment, Gannett is one of only two publishing companies with investment grade debt (Washington Post Co. know longer considers the company as a primary publisher but rather education (Kaplan) company with more than 60% of profitability coming from education division. EW Scripps is the only other investment grade borrower; NYT, McClatchy, Lee, Gatehouse, et.al are all junk bond companies. Many others (Tribune, JRC, etc.) are in bankruptcy.
ReplyDeleteGannett has already signaled dividend deduction; markets would be surprised if it doesn't happen.
In other words, the old "inverse" relationship is on the shelf for the most part during the current global liquidity crisis. Holding cash and paying down debt rules.
@3:52 - no it's not - the stock is responding to rumors that they will not suspend the dividend. it was being battered on the expectation that it would be eliminated based on the NYT action
ReplyDeleteif your not getting a taste of the free cash flow, you don't want to own gannett - the stock price reflects future earning potential but will price up based on maintaining a very attractive yield - debt be damned
it's also not hurting that the market is generally up on the bank news and other comments that the recession will ease by the end of the year
ReplyDeleteThe overall stock surge is probably the real reason. Everybody's up right now. Us too, due to knee-jerk reactions. Even oil is up for the same reason. Let's see what happens tomorrow.
ReplyDeletewe are not up 11% on based on the broader market
ReplyDeleteWhat time did the board meeting begin, and do you think they'll make a public announcement today?
ReplyDeleteapparently you need a graphics editor - i'm surprised you can't rustle up someone to collaborate with
ReplyDelete4:38 pm: LOL. Looks clumsy, yes. But it didn't cost me a dime. Plus, look how fast I can turn it around. Speed to market, baby!
ReplyDeleteSHORT SELLERS ARE LURKING!
ReplyDeleteIf they could just get it back over $5, it will be shortable again!
ReplyDelete