At today's closing price, $3.86, Gannett's shares have plummeted 95% since July 15, 2005, when Craig Dubow became the company's sixth CEO; shares closed that day at $72. Performance of GCI, industry competitors and the widely watched S&P-500 Index over the period:
- McClatchy: down 99.3%
- Lee Enterprises: down 99.2%
- Gannett: down 94.7%
- New York Times Co.: down 88.8%
- News Corp.: down 60.7%
- Washington Post Co.: down 54.8%
- S&P-500: down 35.7%
Gannett's dividend yield is now an unconscionably high 42%, pressuring the board of directors to cut the payout when they meet starting on Tuesday. Members have another example to follow.
Today, the cash-strapped New York Times Co. suspended its dividend entirely. NYT Co. joins a growing list of media companies, including E.W. Scripps, Media General and McClatchy, that have suspended their dividends, The Wall Street Journal says.
[Image: Google Finance]
Now that certainly tells the story of the "transformation."
ReplyDeleteJim: Listings suggest all those stocks are up except GCI -- need a "down" or minus sign in front of each.
ReplyDeleteGood point, 10:56 pm; I've fixed it.
ReplyDeleteI am not defending Dubow.
ReplyDeleteHowever, the price also was significantly higher than $72 at times between 2000 and 2005.
It is unclear how cutting the dividend helps the price of the stock, which at the moment is an income play, not a growth play.
In one or two sentences, how would anyone posting critically here change the dynamic? The newspaper business is in the midst of a tremendous secular change (things ain't never going back to 1990). And much of the core of the remaining advertising is in the parts of the economy most affected by the recession.
Stock price is perhaps the worst way to measure a company or the economy. After all, it is primarily tied to short-term results. And focusing on that has created all sorts of other problems. In the newspaper world, we do have Big Al to thank for that. Not.
I'm glad to see you put all the other major media company numbers alongside Gannett, Jim. I think it adds perspective.
ReplyDeleteI'm fascinated by the dividend debate. This company just cut thousands upon thousands of jobs, shrank newsholes around the country, deeply damaged its ability to actually perform the public service of reporting the news...and if it doesn't cut its dividend, you'll know what's important. Those of you who became unemployed to protect that giant disco biscuit of a dividend should feel free to give Gannett all the respect it would deserve for such a move.
Cutting the dividend is imminent. But it will have little impact on NJ (hi Mr. I) or other employees. It will go to pay down debt or buy back stock or something, and I guess that means something good. Maybe if it was invested in a new venture, it would be good.
ReplyDeleteBut it will have little effect on those who are overworked. Just like cutting out some miniscule expense will have an effect.
Are employees calling for Pruitt, Junck and Sulsberger to be fired?
ReplyDelete