[GCI traded as low as $4.82 a share today]
Gannett's stock has just closed at $4.96 a share, a critical level that could spur mutual funds and other big investors to dump it from their portfolios, risking further decline. Such institutional investors own most of the shares, and are prohibited by their charters from holding stock worth less than $5.
The new low pushes the dividend yield up to 32%, pressuring the board of directors more to cut the payout -- a possibility Chief Financial Officer Gracia Martore (left) warned about Friday, during the fourth-quarter earnings conference call.
"Every company globally is very focused on conserving debt, conserving cash,'' Martore told Wall Street analysts, according to Seeking Alpha's transcript. "I think that you will find that we had to look at the dividend back in October and I think that the board wisely wanted to see what the impact of a burgeoning credit crisis and more difficult economic conditions would bring."
Martore continued: "We will -- the next time the board has to act on the dividend is in February and I know that there'll be significant conversation around that. In the context of where credit markets are, where the economies are and where cash conservation comes into play across the country. So we will take that up with the board again in February and we will act appropriately."
With today's close, Gannett's stock is now down 86% from a year ago vs. a 39% decline in the S&P-500.
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[Image: Google Finance]