iPhone update: Gannett's stock plunged 8% today, closing at $4.19 a share. The company's total market value has now dived below $1 billion, to just $956 million -- a stinging rebuke by Wall Street of CEO Craig Dubow and his team.
Earlier: The stock's new low is now $4.20. It just happened minutes ago, sending the dividend yield above 38%, amid speculation the board of directors could trim the payout at a meeting this month.
Friday, February 13, 2009
46 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
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There is possibily some short selling going on in anticipation of a reduction in the dividend.
ReplyDeleteBut such a reduction (in dividend and share price) may open a buying opportunity.
Come on Gannett, get it up, get it UP, GET IT UP!!!
ReplyDeletethree bucks! three bucks! three bucks! three bucks! hahah i love watching this now that i'm out of GCI
ReplyDeleteWow .... $4.20???
ReplyDeleteHey Gannett corporate brain trust... how have all those layoffs and cutbacks worked out for you, huh?
Yep.... $4.20 ...
Just ponder that for a while
I hear that at 3.50 we get a new CEO.
ReplyDeleteSomebody, anybody, but some Gannett stock!
ReplyDeleteUm, that was supposed to read BUY Gannett stock.
ReplyDeleteCan you tell I wasn't a copy editor when I worked for Gannett?
I am plugging for it to collapse below the annual dividend payout because then GCI will be paying investors to buy their stock. What a worthless operation they have made this.
ReplyDeleteAs a person whose stock portfolio has always been highly risk adverse, I can't imagine HOW Gannett stock reached this level.
ReplyDeleteThis used to be a company rolling in profit. Is it because it bought whatever it lusted after, building a newspaper kingdom? Can someone speculate, like they do on CNBC?
i compare it to the kid who had the best cd collection of music 5 years ago, he was the man. now, who gives a shit.
ReplyDeleteRally caps! Rally caps!
ReplyDeletenew low $4.17
ReplyDeleteUmmmm Next Headline in your weekly newsletter....
Gannett Co. Inc. up for auction on the court house stairs in McLean VA on June 1st 2009 at 9AM
Maybe if we hold our breaths, we can keep the price afloat.
ReplyDelete1 - 2- 3- hold it!
No fizzling!
So let's think this through.
ReplyDeleteThe board is stocked with money managers.
Funds already own a lot of stock.
They can acquire more as the price drops.
They pick up, in their sense, a bargain, and sell off the pieces.
No buyers for a particular property? No problem. Just shut it down.
No turnaround artists in this game.
What was that stock price again?
"Can someone speculate, like they do on CNBC?"
ReplyDeleteSure! Gannett is doing what it has always done. Buy newspapers, cut them to the bone, and rake in the profits. This works when you're the only game in town. IT'S ALWAYS WORKED THIS WAY. HOW COME IT'S NOT WORKING NOW? IT'S NOT FAIR. EVERY OTHER CEO HAS GOT THEIRS, IT'S MY TURN NOW!!!
Regards, Craig
2004 = $90
ReplyDelete2009 = $4
is there really any doubt. it's just a matter of time. and there's not much left. i'm shocked that there are people who still think GCI will pull out of this nosedive.
All those years of free-spending with borrowed money have come back to haunt Gannett. In this market, investors are being extremely choosy about stocks and are avoiding companies carrying heavy debtload like the plague. Strong balance sheets are the order of the day. Gannett borrowed money to make acquisitions at peak market prices. The upcoming $6 billion writedown is a consequence of Gannett's ill-advised borrow-to-buy strategery.
ReplyDeleteWhat a waste those layoffs were. The suits got rid of some great and talented people, who could have helped in the comeback efforts at various Gannett properties, but now are left with short staffs and plunging stock prices. They lost on both fronts. Quality is way off, mistakes are way up. People who remain are feeling burned out. The public is beginning to realize they are getting an inferior product, so these newspapers will continue to lose circulation as a result. Gannett should have resisted the urge to layoff people. It didn't help stocks nor did it improve the image of its papers. And if Gannett felt there was some dead wood in the ranks, well, there were other ways to get rid of those people over the years. Instead, they cut so deeply and so unwisely in many cases, they can no longer expect to improve their products. Just isn't the staff or resources to do so anymore, which of course will result in more losses and further watering down of content.
ReplyDeleteInvestors in Gannett saw the haphazard manner in which people were let go. Word spread about how sloppily this was done. Profit declines couldn't all be blamed on economy, but the economy sure exposed how badly managed this company is on all levels.
When crisis came, Gannett threw many of its best and most loyal folks overboard. That didn't impress investors and sure didn't do much for morale. So no one won. Those out of work are in utter despair. Those remaining are treading water. The bean counters don't have fewer beans to count. The reputation of the company is stained, and there is a dollar figure attached to that, too.
By the way, remember when the word "layoff" meant that it was probable you'd be rehired if finances improved? What happen to those days? Layoffs really are firings now. No one is rehired, not in Gannett, anyway. Of course, when those folks were laid off, Gannett didn't make any efforts to salvage any jobs. They didn't offer transfers or lesser hours to anyone. They just said goodbye. That was quite an eye opener in terms of the lack of creative thinking and lack of humanity in the towers.
Gannett has a major image problem on its hands. And that is part of the reason why things are so dire. It's not all the economy. It's years of rumblings from those who have worked for Gannett. It's the layoffs and lack of compassion. It's the stupidity in getting rid of some of the best can-do people in the business. It's the flagship paper, USA Today, and how it isn't even in the top 10 in terms of salaries at major dailies, even though it's number one in circulation. It's the OT problems. And it's the wastefulness that can been seen in just a brief walk around the towers. This company's image is shot, and all the fountains and Italian marble in the lobby isn't going to change that. What will improve things are gestures of kindness. Smart management. Reaching out to those who were lost in December. Improving the karma. Cutting back on junkets.
Simply laying off or furloughing employees isn't going to impress anyone, not even investors.
You reap what you sow.
Anyone notice NYT also dropped thru its 52-week low and is down about the same as GCI over the last couple years? Its debt has a lower rating, its pension fund is in worse shape, its print circulation is about to drop under the "psychologically important" (whatever that means, Jim) 1M mark. McC and CD deserve plenty of criticism, but reality is more complex. Let's try not to reinforce the stereotype that journalists are simplistic.
ReplyDeleteThe revenge of the "blue ball." From that day on, USAT has been slowly dying, and its corporate neighbor isn't doing so well either. Mother Gannett is on life support. Those who have worked there since the move to McLean know what I am speaking about... It all began turning at about that time. Curleys left. Newsroom scandals erupted. Editors were pushed out. Buyouts backfired because too many quality people were lost, including at least two former "employees of the year." Others with great institutional knowledge, soon after the buyout departures, left on their own as they saw the writing on the wall. And then layoffs and furloughs. A similar story probably exists throughout Gannett, but at USAT/corporate HQ, the legend of the blue ball is growing in stature.
ReplyDeleteSorry, I can't resist this...
ReplyDeleteTo the mental giants that laid me off in August, the stock was at least $21.31 and right not it's, what, $4.20? Wow, you're brainchild plan is really working well isn't it. Imagine, after such total disregard of so many loyal employees and destroying so many lives, you're not doing so well are you? Gosh, what could have gone wrong I wonder?
So to the butt kissing directors that don't have enough sense to get in out of the rain that you kept, are they saving your nest egg?
I didn't think so.
So many managers and directors that were kept simply because they kissed butt, have a great day and good luck finding jobs when it all comes crashing down!!
The Motley Fool today mentions GCI's fall in a lesson about avoiding permanent capital losses.
ReplyDeletehttp://tinyurl.com/bo5zc6
This is not intended to enable CD, but there is a point about the changing nature of businesses and how some become obsolete.
Which brings back thoughts of our legacy decisions 20 years ago that prevented us from entering some new businesses compatible with imparting news.
Ever notice how often the companies that run the "pipelines" for commodities -- natural gas, cable tv, ISPs -- make so much more money that the commodity supplier?
Wow... $4.19.... how pathetic. How pitiful.
ReplyDeleteAnd yes, the "blue ball" legacy is no myth.
I worked for Gannett when those two USAT women were fired for touching the "sacred blue ball" at headquarters.
The story blazed through newsrooms throughout the company.
Uh-oh. Crap! That was the reaction. At that moment, we knew this was a vile, vindictive, vicious miserable company.
I quit a couple of years later. Forced out really. Gl;ad I did. Sold all my stock at nearly $80 a share. Hate this miserable company with an amazing passion!
And yes, those who remained should have taken heed to the "legend of the blue ball."
The unfortunate reality is the economic climate is effecting a large part of the fall. Okay, that does make sense but the real reality is that Gannett stock has been falling for years prior to the "economic climate" under the watchful eyes of the wizards at corporate and the local Directors and V.P.'s who prefer butt kissers versus talent.
ReplyDeleteHere's the 2001 story about the curse of the blue ball:
ReplyDeleteBy Lloyd Grove
Washington Post Staff Writer
Wednesday, December 5, 2001; Page C03
When Gannett Co. and USA Today moved into their palatial new $300 million corporate headquarters at Tysons Corner recently, some employees were
strangely drawn to the "big blue ball." That's the Lita Albuquerque sculpture on display in the 11th-floor executive suite just outside the offices of Gannett Chairman and CEO Douglas H. McCorkindale and USA Today
President and Publisher Tom Curley.
"It's hypnotic," said veteran USA Today sportswriter Karen Allen, 48, who last week paid a fateful visit to the sculpture, titled "Aperture," with two colleagues -- sports special projects editor Denise Tom, 49, anddatabase editor Cheryl Phillips, 39.
The women concede they were in a silly mood when they made their Tuesday afternoon pilgrimage to the specially commissioned installation, which cost
Gannett nearly $100,000. "We were being stupid," Phillips told us yesterday.
After noticing fingerprints and scrawls in what appeared to be blue dust covering the sphere, they touched the surface. Then Phillips and Allen playfully traced the words "Kilroy was here," as well as Denise Tom's name.
Tom tried to blot out her name and nervously backed away. The "dust" was actually pigment that awaited a sealant. The whole thing was caught on videotape by security cameras.
Two days later, USA Today sports managing editor Monte Lorell summoned the
women and demanded an explanation. The three also met with Gannett personnel and security officials, and apologized for whatever damage was inflicted and offered to pay for repairs. Phillips sent a remorseful letter to Curley.
But on Monday, the ax fell. In separate sessions, Lorell told all three they were fired effective immediately, apparently with no severance pay.
"There were three employees involved in an incident and an investigation was conducted and security tapes were reviewed," Curley told us yesterday, adding that criminal charges were considered. "People came to a conclusion and made recommendations to me, and after hearing them, the decision was made." Curley called the firings "irreversible."
The penalty was greeted with shock from the women's colleagues, some of whom threatened to boycott the company Christmas party. "Everyone is horrified,"
a USA Today staffer who asked not to be named told The Post's Howard Kurtz.
"Everyone is thinking this is an insane, ego-related firing."
Sculptor Albuquerque was equally incredulous. "Oh my God! Are you kidding?
This is crazy!" she told us yesterday. "I think it's a terrible thing,
firing people from a lifetime job for what is essentially graffiti, and I'd be willing to write a letter to the president of the company." When told
what the women scrawled, Albuquerque laughed, and added: "It's certainly reparable for not a lot of money."
Yesterday Phillips, a two-year employee of USA Today who last year was named one of the paper's "Enterprise All-Stars"; Allen, an original USA Today staffer with 25 years at Gannett; and Tom, a 26-year Gannett employee and the single mom of a 14-year-old boy, hired Washington lawyer Steve Hoffman.
--30--
AJR reported on the legend of the Blue Ball at the time:
ReplyDeletehttp://www.ajr.org/Article.asp?id=2435
The legend of the BLUE BALL at USA Today-Corporate. Wow. That was an amazing act and maybe was the turning point. It was the first time I saw how egos were running wild. This became a mean-spirited company. It became so materialistic and shallow. It was Rome at the beginning of the end.
ReplyDeleteYou know there has been a lot of complete nonsense written on this blog but this string beats them all. How on earth can you be so naive to think that Craig D is in some way responsible for the fall in the company's stock price. He cannot do anything to prevent it. Our industry is going through the worst economic downturn in living memory and that's why the company's share price is where it is.
ReplyDeleteIt is so easy for everyone to point fingers at the people at the top of the company and blame them for the pain we all feeling but it is just bollocks (UK expression).
The top brass are powerless to do anything more than just run the company as efficiently as possible to get us through this. And we will get through it and the economy will improve. Have any of you thought about what you can do to help the management team to get through this? No - I don't think so. It is far easier to throw stones.
Hundreds of thousands of dollars were spent on the blue ball in the crystal palace. That's how decadent this company had become. Now wonder we are where we are now.
ReplyDeletePeople talk about corporate jets and greed, but the "blue ball" episode...takes the cake.
ReplyDeleteto 5:51 PM
ReplyDeleteQuit being such a Big Girls blouse and wake up. The CD and GM decisions over the last 4 years, the hairbrained initiatives and the repurposing of the same old same old failed produces and services under new names DID IN FACT help lead the company to the low they are at today. Wanker!
Throw stones?
ReplyDeleteI prefer to throw my blue ball!
5:51 No, Craig D. has the blood of this company all over his hands. Here is an executive who should have had the business sense of diversifying GCI's holdings, rather than concentrating on newspapers. A diversified company, like Scripps, would have been able to ride through this recession in a way that GCI cannot. What did Scripps do? It diversified into cable TV, which it sold off to Comcast, then founded Home and Garden TV, the Food Channel, a couple of other cable channels, and it spent $250 million to buy Shopzilla. The newspapers are in the same shape, but Scripps is able to get through this period with no debt, and the revenues from Shopzilla carrying the Networks through. Smart. Two years ago, GCI was 1O times as large as Scripps. Today, Scripps and Scripps Networks are almost even.
ReplyDeleteThat is what Craig Dubow did not do. What he also did that other newspapers did not do is decimate staffs before the recession began, and loaded up GCI with a huge central staff of expensive vice presidents now draining the diminishing profits of the newspapers. He's been humiliated, and should be dumped because he is a horrible administrator. I could give you more, if you wish.
not even a horse sized dose of viagra could this company up.
ReplyDeleteAt every fork in the road, the brain trust that is responsible for our corporate future makes the wrong choice.
what surprises me is the velocity of the down draft. It is relentless. It has swept through $5 and now is scheduled to break through $4 next week, and so on. At this pace, it will be below $1 by Easter. These money market funds Jim keeps highlighting are going to be slaughtered, and they are funds that invest 401K funds from employees of other companies.
ReplyDeleteto 5:51
ReplyDeletewhy is it that when the company does well it is because the CEO is a genius and we should be so lucky to have him or her guiding us. But when the company is bad it is forces beyond their control? please explain!
I have written 2,477 posts, but this is only the second bulletin that I've moved. The first was on Oct. 28, "Gannett laying off 10% of newspaper staff; Dickey warns in memo: 'fiscal crisis is deepening.'" You can read the full post here: http://tinyurl.com/5ql234
ReplyDeleteUnfortunately, I expect to be moving bulletins more frequently.
The consequences of unquenchable egos and rampant greed have been recorded through the history of mankind. The more I think about all this, the more I'm starting to see it for all its cyclical irony.
ReplyDeleteAnyone who thinks the all of Gannett's newspapers are going to shutter if the company has to declare bankruptcy should take a short course in what bankruptcy actually is. It freezes demands from creditors and puts assets in the hands of a trustee(s), in simplest terms. It allows a company to reorganize debt but the company's plan has to be approved by the trustee.
So hang in there, people. Even if this happens, it may actually be a GOOD thing for newspapering. Because the show will go on while the courts tell the company what it can and can't do.
Hey 5:51p, take Dubow's dick out of your mouth for a second and think of your lame-ass post. Certainly the economy is bad, but that has only occurred 6 months ago! This ass-wipe, Dubow and his boss Martore have been in charge for the past 4 years! Along with losers like Moon, Dickey and Williams (who have all been sucking blood from this company for way too long).
ReplyDeleteIf Dubow was a leader, he would have anticipated the worst years ago and planned for it. He is the wrong leader for a company like Gannett and worse off, he is not a leader for this economy.
7:37 Bankruptcy is unlikely. More likely are new directives from the Crystal Palace to cut costs and reduce staff. They will cut this company back to the bones, then cut more. These papers cannot sustain any more cutting, but they are going to get them and there is no one willing to stand up and say no. That is because the managers hand-picked to run the papers are beholden for their jobs to the Crystal Towers. So we face cutbacks once again. Bankruptcy is a distant possibility, but a far distant possibility the way I see it.
ReplyDeleteThere is now an inexorable decline setting in. Big cap money market funds will no longer spend their 401K deposits on GCI because it is below $5 threshhold and no longer a large company with more than $1 billion in valuation. So they are now going to be seriously dumping. The newspaper industry is in such sucky shape that few are going to buy, even at this incredible dividend level. A 40 percent dividend is very unusual. The one hope is that some hedge fund decides to jump in and buy GCI with the expectation of taking it over and selling off the pieces. But hedge funds got their fingers burned badly in newspaper investments in the last year, plus there is no market for newspapers. So I see only down, down, down.
ReplyDeleteYou win ... err ... we all win, kinda. DoDow is more than likely gone now. Yeah he gets to keep the golden parachute now, but I kinda wish his plan would have worked!
ReplyDeleteHow did the blue ball firings lawsuit turn out? Were the three reinstated? Anyone know?
ReplyDeleteUndisclosed.
ReplyDeleteThey're still gone.
Blue Ball defacers cannot be forgiven. Or excused.
9:55 p.m. wrote:
ReplyDelete"There is now an inexorable decline setting in. Big cap money market funds will no longer spend their 401K deposits on GCI because it is below $5 threshhold and no longer a large company with more than $1 billion in valuation."
Money market funds do not invest in equities (stock) regardless of price. They are required to buy only high-quality debt, commercial paper and the like.
It is large-cap mutual funds that might steer away from GCI at or below $5 -- but it might become attractive to value funds or midcap funds.
He said BALLS, huh, huh, huh. huh. Blue BALLS, huh, huh, huh, huh.
ReplyDeleteThat's cool. Balls.