[Updated at 4:06 p.m. ET.] Gannett's stock closed moments ago at $11.32 a share, down 67 cents, or 5.6%, on a day when global stock markets were roiled by waves of investor selling on fears of a broad economic slowdown.
The S&P 500 index, an overall measure of stock market activity, plunged 4.8%. The widely watched Dow Jones Industrial Average dove 513 points, or 4.3%.
Earlier in the day, GCI traded as low as $11.25, a new 52-week low. Year to date, the company's stock is now down nearly 25%, according to Google Finance. The S&P is down 4.6% during the same period. The Dow is off 1.7%.
GCI's stock buyback
Other newspapers stocks have fared even worse this year. Lee Enterprises, struggling to avert bankruptcy, has plunged 68% year-to-date. And McClatchy has tumbled 60%.
Today's rout follows GCI's announcement July 18 that the company plans to buy back up to $100 million shares over the next 12 months, a move designed to save money by reducing dividend payouts, while also bolstering the stock's price. That announcement came even as Corporate doubled the quarterly dividend to 8 cents.
In fresh signs of U.S. economic weakness today, first-time claims for unemployment benefits edged down to 400,000 last week, the Labor Department said, according to this Reuters story. The figure comes a day before the government's monthly payrolls report, one of the most closely watched numbers measuring the U.S. economy.
Worthless stock options
GCI's stock has been trading below $16 a share since early March, which means hundreds of thousands of stock options given to CEO Craig Dubow and other top executives in February have now been worthless for months.
That is because those options carry a so-called strike price of $16.23 a share. In other words, the options have zero value unless GCI trades above that price.
Indeed, at the current trading price, several hundred thousand other options, granted last year at a $15 strike price, are also worthless. (Historical prices over past 52 weeks.)
In total, Dubow alone holds 1.6 million options. Of those, 500,000 are "above water," because they have a strike price of only $3.75 each. (See Page 38 of the most recent shareholder proxy report for a complete list of option awards to senior executives.)
The S&P 500 index, an overall measure of stock market activity, plunged 4.8%. The widely watched Dow Jones Industrial Average dove 513 points, or 4.3%.
Earlier in the day, GCI traded as low as $11.25, a new 52-week low. Year to date, the company's stock is now down nearly 25%, according to Google Finance. The S&P is down 4.6% during the same period. The Dow is off 1.7%.
GCI's stock buyback
Other newspapers stocks have fared even worse this year. Lee Enterprises, struggling to avert bankruptcy, has plunged 68% year-to-date. And McClatchy has tumbled 60%.
Today's rout follows GCI's announcement July 18 that the company plans to buy back up to $100 million shares over the next 12 months, a move designed to save money by reducing dividend payouts, while also bolstering the stock's price. That announcement came even as Corporate doubled the quarterly dividend to 8 cents.
In fresh signs of U.S. economic weakness today, first-time claims for unemployment benefits edged down to 400,000 last week, the Labor Department said, according to this Reuters story. The figure comes a day before the government's monthly payrolls report, one of the most closely watched numbers measuring the U.S. economy.
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| Dubow |
GCI's stock has been trading below $16 a share since early March, which means hundreds of thousands of stock options given to CEO Craig Dubow and other top executives in February have now been worthless for months.
That is because those options carry a so-called strike price of $16.23 a share. In other words, the options have zero value unless GCI trades above that price.
Indeed, at the current trading price, several hundred thousand other options, granted last year at a $15 strike price, are also worthless. (Historical prices over past 52 weeks.)
In total, Dubow alone holds 1.6 million options. Of those, 500,000 are "above water," because they have a strike price of only $3.75 each. (See Page 38 of the most recent shareholder proxy report for a complete list of option awards to senior executives.)
No worries. Craig's holding options issued when the stock was in single digits. The board will dole out more at current prices, and he will get stock instead of options to cover the pain he wont share with regular shareholders. Dont count out the fat cash bonus, either. This guy is covered in good times and bad. We wouldnt want to lose his leadership skills and journalism expertise, would we?
ReplyDeleteYeah, we can't lose Craig. Not now, in the middle of our transformation. He's our go-to transformer. We need to pay him a bigger salary and bonus and lower the strike price on his underwater options. He deserves a company car upgrade, more personal travel on the company jet, more meals cooked by the company chef, more rubdowns by the company masseuse and more "down" time with the company concubines. Yes sir, we can't let the silly matter of this stock price collapse cause us to lose our illustrious leader.
ReplyDeleteJust imangine if we didnt have our fearless leader Craig Dubow calling the shots. The company would be a total diaster.LOL.
ReplyDeleteCraig should go on undercover boss and show the world what a great LEADER he is.
ReplyDelete1:38 p.m. I can understand the concubines, but really, a company chef? So over the top.
ReplyDeleteThe options are worthless?
ReplyDeleteYou mean, like their owner?
Sounds like a perfect match to me.
2:09 Undercover Boss is a GREAT idea! He wouldn't even have to disguise himself because nobody has met him. It's not like he visits sites regularly. A good dose of reality might be good for him - see what the "little people" do.
ReplyDeleteNo one would confuse this clown for a CEO. But what would be the point? To learn what a reporter or editor does? He doesnt listen to anyone below vice president level staff. Or image and branding expert Pence.
ReplyDeleteMaybe he can pretend he is one of Heather Frank's AOL castoffs and get hired as a GM for one of the non existent verticals. Or help director of content Matt.He has no actual daily journalism experience, either.
ReplyDeleteMr Dubow deserves what he's not getting. I feel bad though for the Gannettoids that will be laid off as the company's fortunes plunge even more and Dubow, Martore et al try to raise our faltering fortunes in the only way they know how. FIRE MORE PEOPLE. In my mind's eye, I see them sending the notes out now. Reduce expenses and payroll by another 10-15% this fall.
ReplyDeleteMark my words, there will be another round of layoffs and furloughs this fall as a direct response to the last month or so of economic news.
Worthless goes good with worthless.
ReplyDeleteTime to hire more VP's!!!!
ReplyDeleteThese corporate leeches need to know that in personal encounters with employees, they might be greeted with smiles and pleasantries, but beneath the welcoming veneers is nothing but contempt. Dubow and the other leeches might be able to console themselves with money and lives of luxury, but they will never get what they really want, and that is professional respect. This has to nag them because they've seen how demanding CEOs like Jack Welch can win the respect of investors and employees alike. The egos of CEOs is such that they want their tenures to be unmatched, that during their reign revenues and profit rose XXX percent, the payroll grew XX percent, products received widespread accolades and the stock price rose XXX percent. And what will the Dubow Era be remembered for...?
ReplyDeleteDubow's reign over Gannett is like George W. Bush's presidency -- an inept, clueless, idiot who leaves the place in shambles and destitute.
ReplyDeleteWhat about the chicken?
ReplyDeleteWhat's his nickname for Martore? The best part of the Bush administration was "Turd Blossom" for Karl Rove. The worst part was pretty much everything else.
ReplyDeleteLeave the politics on someone else's blog.
ReplyDeleteBut if you insist on opening that discussion: 'We didn't know it was so bad, Coulda been worse' is a hell of a re-election slogan.
Was Craig a Community Organizer before he came to Gannett?
ReplyDeleteDunno, but he's a Community Unemployer now.
ReplyDeleteIf Craig came to my site for a meet and greet I would find any excuse not to be there, meeting outside of the building, car accident, food poisoning, snake bite, leg in leg hold trap, anything would be preferable to his snake like smile as he sticks the knife in your back. "One less employee to lay off, Smither get me a clean knife," he said.
ReplyDelete