GCI's shares (chart, above) peaked at about $90 in April 2004, before starting a decline that's now cut their value by more than half. (For perspective, the blue arrow shows where Craig Dubow, left, became CEO: July 2005.)
On closer inspection, however, much of that decline came in the last six months, when shares plunged 38%. And it now appears Gannett's No. 1 shareholder may have lost more than $400 million on its stake during that period -- likely bringing more pressure on Dubow and the other directors.
Early June was a turning point. The accelerated fall could explain why Dubow warned employees in September about hard times ahead.
The broader stock market, as measured by the S&P-500 Index, didn't implode during those six months; that index is down less than 8% since early June. And while other newspaper publishers' stocks -- like the New York Times Co.'s -- tracked Gannett's post-June fall, GCI's plunge has been especially bad. (Among major publishers I track, only McClatchy Co. shares appear to have fallen harder during the period: 47%.)
The big question: Why the post-June collapse? The more urgent question: How long before top stockholder Brandes Investment Partners starts pushing Gannett's board to act -- assuming that hasn't already begun. Brandes owned about 20 million GCI shares as of June 30, when the stock was at $54.95. (I'm using the InsiderScore numbers from this post.) That stake was then worth about $1.09 billion, my numbers show. Assuming Brandes still owns those shares, it's now looking at a paper loss of $415.5 million. And that doesn't count any losses on the six million more Gannett shares it bought since June.
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[Chart: Google Finance]