[ GCI vs. major media stocks, as of 11:13 a.m. ET]
The New York Times Co.'s total market capitalization, $583 million, is now 17% higher than Gannett's -- a rankings shift that would have been unthinkable only a few months ago. Fox News owner Rupert Murdoch of News Corp. could now buy USA Today for the price he reportedly liked 10 years ago, $1 billion, plus assumption of debt -- and get the rest of GCI and all of the NYT company thrown in for free.
Gannett had the double whammy of of a profit sell off in the stock market and it's credit rating being lowered by Standard & Poor’s to junk.
ReplyDeleteHas anyone not lowered gannett to junk?
Look for gannett stock to worth less than the sunday paper by next week.
In all seriousness, at what price does GCI become a acquisition target, even if just to break up and dispose of the parts at a profit?
ReplyDeleteI've got to think we've getting perilously close.
I don't think Gannett becomes an acquisition target for somebody looking to sell the pieces until someone thinks they could turn a profit on the real estate alone, which might be tough considering the acquisition of debt and the terrible economic climate.
ReplyDeleteNobody is buying papers, so thinking you're going to sell them off piecemeal would be rather foolish. It looks like our paper in Tucson is going to close (not sell). The Rocky Mountain News just closed. And there doesn't seem to be any clamoring to buy the San Francisco chronicle, which is the big player in a one-paper town.
So the big question is, who would you sell the pieces to? You might find local investors in a few markets, but I think you'd have to figure on at least half the papers simply shutting down.
A more likely takeover scenario would be with somebody like Murdoch who would want USA Today and see the smaller properties as a bonus. And who knows at what point he would become interested.
The truth is, very few serious investors are buying newspaper stock anymore. And who can blame them?
After what happened to private investors at Tribune Co., and in the papers in Minneapolis and Philadelphia, any possible buyers have stepped back on the sidelines.
ReplyDeleteUntil newspaper publisher advertising sales reach bottom, no one can know what profits might be. And until then, shares will continue to fall, I would think -- perhaps not as dramatically as the past week, but down, nevertheless.
Unless your head is in the sand, you have got to see the days ahead being worse that the ones today.
ReplyDeleteNB
Thomson's pre-sale "Transformation" into newspaper clusters may offer an answer to some of the questions posed.
ReplyDeleteBut, if that's the model that Gannett wants to quietly follow it doesn't seem that they are even close to doing it well nearly ten years later.