Still, shares are up 7.3% from a year ago, although that lags the bigger 11% gain in
To be sure, other newspaper stocks have been whacked even harder. Lee Enterprises, which publishes the Arizona Daily Star, has tumbled 43% from a year ago. The New York Times Co. is down 12.7%. And McClatchy, publisher of the Miami Herald, is off 9.8%.
GCI's trading low for the past year was $9.53, and its high was $19.69, a plateau reached April 16. Shares have been drifting down ever since on worries the nation's economic growth is stalling, dampening consumer confidence and pinching prospects GCI will be able to significantly ramp up revenue.
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| Martore |
Now, there's rising speculation among Gannett Bloggers that the company may be planning another round of job cuts, furloughs and wage freezes. To date, however, Chief Operating Officer Gracia Martore hasn't shown her hand, other than to say two weeks ago that she wasn't considering any "significant" severance costs in the current quarter.
Wall Street is growing impatient: The past two quarterly financial reports have left investors deeply unhappy.
- On July 15, the day before GCI released its second-quarter report, shares closed at $15.11. The day of the report, they plunged to $13.50 on heavy trading: nearly 13 million shares.
- Two weeks ago, the day before the third-quarter report, shares closed at $14.09. Then, the day of the report, they dived anew, to $12.85; nearly 16 million shares changed hands.
Maybe Craig and Gracia should just stay home on the day of the quartely results. The more they say the worse it gets!
ReplyDeleteI don't understand why anyone would put their money in GCI, when you can get better returns by investing in Google, Applie or scores of other companies. Gannett is obviously not growing, and is loaded down with legacy costs of iron machinery, huge costs of paper, and payroll. If you are going to publis, the Internet is much more efficient, which is why the speculative money is pouring into creating Web sites for news. That brings up another problem of Gannett facing real competition in markets it once monopolized.
ReplyDeleteHowever, I am not convinced the Internet is going to take over the news business. It will certainly have a major role in breaking news because it is quicker than any newspaper can possibly be in conveying breaking news. Because of its bottomless space, it also is an incredible resource for background and historic information.
My approach would be to concede these matters to the Internet completely and instead concentrate on the one area where the Internet is the weakest: investigative reporting. Investigative reporting is risky and requires editing because it is often potentially libelous. Some newspapers excell in this area.
Also weak, but improving, is professionally produced local news. Again, this is an area where newspapers have a solid foothold.
Contrary to the direction Gracia is moving, I would not envision scrapping the dead tree product in the immediate future. About 75 percent of newspaper revenues come from the dead tree product and no matter where you look, only about 5-7 percent from the Internet. Yes, the Internet is sexy and new, but there is a hard core of people who like and use the dead tree product. We should not turn our back on them. They are our major customers, and will be for the foreseeable future.
Digital is a niche and should be treated that way. I don't see the evidence yet that it can produce the sort of revenues needed to operate a newsroom. It took a couple of centuries for Gutenberg's moveable type to replace the hand-crafted illustrated Bibles and I think it will be after the lifetime of all of us before the Internet replaces the dead tree product.
For a wealthy company, the solution is to invest all new resources into the newsroom. This is directly opposite to what Gannett is doing and currently planning. But I see investments in newspapers now as the prescription for a dying industry. Slashing newspaper payrolls is just speeding up the death rattles. Investments are going to be needed if we have the sort of investigative and local news reports that readers want and deserve.
The Wilmington paper is ignoring one of the greatest stories of this campaign: Christine O'Donnell's one night stand.
ReplyDeleteGo to www.gawker.com to read it in full, and then www.smokinggun.com to see the effort to expose the man and what they believe is a hoax.
This has to go down as one of the greatest and most malicious smears I've ever seen in a political campaign ever. It doesn't matter your political stripes, just look at this story. NOW has got involved in defense of women's rights, and reporters groups are up in arms because Gawker agreed it bought the story for money.
This raises a great issue in these days of the Internet: should the newspaper of record in the state involved ignore a great political story because it involves sex (actually, in this case, non-sex, but read the Gawker account). I believe this should be published. It is scurrilous -- some say libelous, but I don't think so -- that it is a story in itself not only for Wilmington but for USA Today as well.
After reading that attack yesterday on Gawker, and learning the source was "paid", I found it refreshing to know today that O'Donnell is finally "shaving", albeit in a different way:
ReplyDeletehttp://www.monmouth.edu/polling/admin/polls/MUP37_DE_2.pdf
Jim,
ReplyDeleteI vaguely remember a bunch of crystal palace executives selling their stock last April near the 52 week high. Did they know something we did not? When you look at your chart, it seems very interesting how they all got out near the high.
Good memory. Saridakis sold at the top. Here's the table of all the sales. Notably, Dubow, Martore and Dickey have not sold.
ReplyDeleteWhat am i missing? That chart makes no sense with what is being said to me. It shows stock much lower on Nov. 2 2009, no? Yet you say shares are down 10 percent since a year ago?
ReplyDeleteThat is a chart of a very unhealthy company. Investors who rely on technical analysis look at the 200-day and the 50-day moving average to gauge the health of a company, rather than the day-to-day gyrations. You can go to any financial website like Google Finance and get your computer to do this for you.
ReplyDeleteWilmington isn't ingnorant to the story. We just prefer to report serious news. Not waste ink and paper on pigs in the mud.
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ReplyDelete2:43, 8:33: I've removed the chart and updated the figures to show GCI is actually higher than a year ago, although at a rate lagging the S&P 500.
ReplyDeleteHere's why: Google Finance's raw data contradicts the data underlying its charting tool. When I cross-checked with other databases -- MarketWatch and Yahoo -- I found the same problem. So, I'm going with the data more favorable to GCI.
I've also updated the data for Lee, NYT and MNI, which still shows them underwater from a year ago.
That's it, keep cutting, that's worked so well in the past. Gee, 18 months ago, I was part of a new initiative in my end of the company, which was a bright idea and I thought would be hugely successful. But, oh gee, the initiative never found success because A.) it was never coordinated with the advertising department, so that it never brought in any revenue. (Can we spell S-i-l-o-s?) and B.) It was an idea that did not initiate in McLean, so why bother? (spell again). I was transferred because of the layoffs, but no matter, since no one could see fit to follow up on the Good Idea.
ReplyDeleteBut yes, in lieu of an actual business plan or any ability for any top manager to, you know, actually manage, please keep cutting.
Jim,
ReplyDeleteRE your 12:37 p.m. comment ... if you really want to be persnickety, you'd have to show the GCI returns adjusted for dividend pay-outs, too. Adjusted for dividends, the GCI returns would actually be higher. Of course, a certain number of the S&P 500 companies also pay dividends, so a truly accurate comparison with GCI would adjust for those pay-outs, too. Needless to say, that would be a complicated computation with many moving parts. Not criticizing what you're doing, I'm just saying ...
Good point, 8:44 a.m.
ReplyDeleteHowever, if I figured in dividends, the S&P-500's performance would be even better. That's because the S&P-500's average dividend yield is 1.74%, according to this indexArb table. Yet, GCI's current dividend yield is only 1.35%.
Why even bother reporting the stock price? This board and this management team seems disconnected to Wall Street expectations. Certainly when it comes to accountability to shareholders and management pay. How big will the bonuses be this year? Why?
ReplyDeleteIf there are another round of lay-offs and furloughs, then every employee shareholder should vote against the executive compensation package and every director who has supported these outrageous giveaways in the past. The top 5 corporate execs gave themselves $5 million in bonuses this year. In the case of Craig, it was for straightening out the borrowing mess that he got the company into in the first place. A regular employees would be told to fix it and be lucky they still have a job. Craigy gets a $1.4 million bonus. Anyone outraged? For them to even consider furloughing or laying off the people who really do the work is nothing short of criminal.
ReplyDelete