Tuesday, February 03, 2009
As closing bell nears, GCI shares trade under $5
With less than an hour remaining before markets close, Gannett's stock recently traded for $4.99 a share -- below $5, for the first time since the news industry crisis accelerated. Shares have changed hands for as little as $4.82 today, falling 6%. GCI stock is now down 86% from a year ago vs. a 39% decline in the S&P-500.
22 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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I'd be careful what you wish for. The Market capitalization (now ~ $1.15 B) is dipping just as quickly with the stock dip, opening up the company to a smart hedge funds and corporate raiders who might want to take a gamble purchasing cash-generating assets on the cheap. GCI underlying assets, esp. stakes in Careerbuilder and maybe the big market broadcast stations (esp. DC's WUSA and maybe Denver's KUSA) could sell for a pretty penny, if you can find a desperate buyer. CBS has always oggled the D.C. affiliate and ABC (D.C. ABC affiliate is not an O&O either) could also bid to buy it and flip the network affiliation. Dubow might be setting the company up for a fall so that he can get a nice golden parachute, leaving the shareholders and the shrinking pool of workers holding the bag.
ReplyDeleteNo question anymore this won't end with all Gannett assets intact. It can't. The pressing questions are now ironically the 'Who,' 'Where' and 'When.' The 'Why' and 'How' are foregone conclusions at this point.
ReplyDeleteJim reading between the lines you seem to be taking some joy in this. Instead of focusing on what the problems are why don't you spend some time focusing on solutions. I know bad news sells (as evidenced by your high number of page views) but you would do us all a favor by at least focusing some of your attention on solutions and not just problems.
ReplyDelete2/03/2009 2:08 PM
ReplyDeleteJim is a reporter. He is no longer on Gannett payroll. Why on earth would he or should he assist the suits in McLean (for free I'll again stress to you) in finding solutions to the same and more issues that has him writing this blog in the first place?
Are you utterly MAD COW? (pun intended)
Word verification hatetrad
Gannett suites brought it upon themselves.
2:08 pm: I do not take any joy in Gannett's stock decline.
ReplyDeletePlease help me improve this blog by telling me specifically what you saw while "reading between the lines."
@2:08, there is a deep-seeded disdain for Gannett and the utter and complete mismanagement of a once-proud brand. The recklessness that the management team has shown and complete disregard for company employees have led to this vitriol.
ReplyDeleteAs such, there are many people who would love to see the suits fail.
That being said, Jim's been more than fair throughout the 7+ months I've read his blog.
2:08 PM
ReplyDeleteYou have to know the problems before you can fix them. I think that's this blog's contribution to Gannett. We're all contributing to solutions by pointing out the problems. Now it's up to the company to face the problems---real or perceived---and fix them.
to 2:08
ReplyDeleteWhen there are idiots in suits at the Crystal Palace being handed multi-million dollare bonuses for running the Gannett ship onto the sand bar, why do you feel it is Jim's duty to focus his attention on solutions?
I see you haven't the nerve to come back and answer Jim's or others responces. Typical. Another Kool-Aid induced mass mentality of canned retorts that mean nothing except that Gannett elite are out of ideas.
4.96 at close, and a new low. Bye-bye institutional investors, who don't look at stocks that sell for under $5.
ReplyDelete2:08 You ask for solutions. Here are a handful:
ReplyDelete-- Sell WUSA-TV in Washington to the highest bidder, yes perhaps CBS itself. Corporate is driving this station into the dust, running advertorials instead of news. Interesting aside is that PBS is running advertorials this week as well as part of their fund-raising drive. TV is becoming advertorials and I am using Hulu.
-- Close the D.C. bureau and have the congressional staff operate out of the Senate Press Gallery. It is free.
-- Cut from 10 to 15 percent the bloated staff in the Crystal Towers. They are largely unproductive yet incredibly well paid. This is an economic crisis and while it is nice to have a vice president for advertisting and everything else, it is really not necessary.
-- Establish budgets that are firm throughout the year, and not subject to constant review. Having executives draw up plans for cuts of 2, 5, and 8 percent is a waste of time. Take a look at revenues, establish a budget, and stick to it.
-- Break down the walls between techies and the staff. IC staff should all be techies. Retire those who can't make the transition.
-- 10 percent cut in ranks of managers. Papers don't need this proliferation of executive editors, managing editors and assistant managing editors who are not productive. Back to the days of one editor, one managing editor and that's it.
==I could give you more
2:08, Another solution: sell Crystal Palace and move to a smaller facility in a cheaper location.
ReplyDelete4:18 add sell or close Newsquest. GCI has no business getting into UK, where it doesn't understand the rules or the culture. But with the pound sterling headed into parity 1 pound to 1 dollar, and the UK flirting with bankruptcy, Newsquest is going to be registering a loss for the next decade.
ReplyDeleteIf I were large and in charge, and things keep going sour, I would hope that community leaders would buy the various newspapers and the editors and their staffs could go back to reporting the local news without a bunch of clueless wall street analysts second guessing their every move.
ReplyDeleteI'm fearful, in these hard economic times, that the people who once had the wherewithal to do so are no longer in a position to save these once proud and impressive newspapers.
These properties have been run into the ground like a rented horse.
The issue is not whether there are interested buyers – there are, but whether or not Gannett is ready to come to terms with their over-inflated valuations.
ReplyDeleteIf there’s anything left when Gannett’s done here and elsewhere, then perhaps buyers will emerge. Though, current thinking is that challenger/s will pop up sooner than later using experienced, former employees.
A takeover as outlined by 11:53 is possible, especially as there is a whole load of TARP funds out there looking for good investments. It has been there for a couple of months, but no nibbles. I would suggest that even at $1.1 billion, GCI is grossly overvalued. Look around and see how many newspapers are on the market and unbought. Included among these are once-prime properties in San Diego and Austin. The TV stations have some value, but not much growth prospects as Hulu and other Internet startups now developing alternative ways of delivering TV programs. If programming goes to the Internet, there's not much left for the old networks but old movies, and those now owned by Ted Turner.
ReplyDeleteA takeover is unlikely. Too many investors are aware that the smaller sites have been raped and pillaged in order to merge and centralize operations. They have watched while this operating stratagy has failed, and all but bankrupted the company despite the deep cost cutting measures.
ReplyDeleteInvestors couldnt even buy it up and sell it off site by site because so few sites are self contained and functional. Presses and other equipment have been relocated. Production is impossible at far too many sites now.
Given the degree of ignorance on financial matters that the great majority of posters to this blog display, I would be surprised if any of them are current or former Gannett employees.
ReplyDeleteHey 8:16 if we aren't current or former Gannett employees why would we read this blog?
ReplyDelete8:16 is a McLean suit or a BoD member.
ReplyDeleteThey are still drinking the Kool-Aid and believe that the 2 year nose dive in stock prices is a positive sign, and that turning community newspapers into glorified daily shoppers is the wave of the future that will save the company.
If Jim were to suggest improvements that Gannett accepted, he would at best get a $25 tip from the company suggestion program. More likely, one of the bozos at HQ would steal the idea and get a $100,000 reward and a president's ring!
ReplyDeleteWith Gannett shares having fallen from $90 to $5 in five years, GCI execs have to wonder about their careers and their marketability if Gannett goes down or is broken up. A 45-year-old VP with 15 to 20 years of career ahead of her will look pretty bad being part of a management team that made one bad decision after another in the face of a declining industry. Of course, they weren't highly sought after in the first place, otherwise they wouldn't have ended up at Gannett. Now their fate is sealed, and they're going to hang around to milk the company of all the golf tournaments, college scholarships, pay and benefits they can get until they're physically shoved out of the building.
ReplyDeleteSavings from eliminating the executive bloat would be at the top of savings anyone considering taking over GCI would estimate. And what bloat. Gannett has vice presidents for every possible activity, save making the coffee. We have vice presidents both for human resources and personnel, a vice president for taxes, a vice president for sales strategy, a vice president for digital ventures, a vice president for interactive services, a vice president for strategic planning, and a vice president for information center content. That hardly lists all, but each has a secretary and an office in the Crystal Towers. My guess of a vice presidential salary is $250,000 and up, and I have seen some of their houses so I don't think this is an overestimate. On the other side of the towers, USAT has a newsroom of 400, but a total staff of 2000. So who are the others. It doesn't have presses of its own, so it doesn't have a backroom staff. Who are these other 1600 employees?
ReplyDelete