Wednesday, February 02, 2011

Urgent: GCI closes sharply higher, up nearly 7%

[Updated at 4:12 p.m. ET with closing prices.Shares closed today at for $16.24, up $1.04 cents, or a very strong 6.8%, as investors rallied around Gannett, two days after it reported fourth-quarter financial results.

Earlier, shares traded as high as $16.29. Sales volume surged, too: 5.5 million shares changed hands vs. a daily average of 3.1 million. GCI's 52-week range remains $11.65 to $19.69, a high reached in spring 2010.

The S&P 500 index, a widely watched measure of market activity, was basically flat when trading ended this afternoon. Ditto for the Dow Jones Industrial Average.


  1. Time Warner reported higher-than-expected revenue and profits this morning and other companies in the broadcast and print media biz are rising as well, including GCI. There are similarities between the TW and GCI results -- broadcast divisions at both companies surpassed revenue expectations. The print division at TW (news magazines) was the only area with declining revenue, same as GCI's newspapers. Print continues to be the laggard for all media companies, broadcast and digital are rising.

  2. The fact is, GCI the stock would be fairly valued today, given its (still) prodigious free cash flow, rate of debt repayment etc. at ~$25 per share. The market won't take it there, because the market discounts the future and doesn't believe there is a future for newspapers.

    On any solid evidence (not a glowing press release or earnings conference call hoohah)that GCI is building a viable digital future you will see the stock rocket to $25 and, quite possibly, higher. So far, management hasn't demonstrated a viable digital future, as contributors to this site accurately point out every day. But I wouldn't bet against it.

  3. $16.24 hmmmm not near the $55.00 it was a few years ago is it? Don't break out the champaigne yet. Gannett doesn't so anything right or innovative. This is more of a blip. Sell your stock while you can.

  4. 7:21: No. This is about business, not about personal feelings. I will sell when the market revises its value estimate. And it will. Meantime, I'm paid a dividend to wait. Works for me.

  5. As long as it has employees to fire, Gannett will be able to offset flat revenue and maintain the profit margins/EPS growth it needs to remain on speaking terms with the institutional buyers who are keeping this dog afloat. That, my friends, is all there is to it.

  6. Obviously The Street is clued in on the 3,500-5,000 layoffs coming, thanks to My Boss' head-up post.

  7. 8:43 is correct -- to a point. But management, for all its failures (and make no mistake their failures are real and serious) is not so clueless as to believe that this can go on forever. They know it cannot. Only the most rabid Gannett-basher would claim that. Rabid people tend not to make money in stocks.

    I'm convinced management is working on transformative change, though not quickly enough to suit me and many others who post here. They need to step up the pace of this work while revenues from print are still strong. And make no mistake, revenue from print and the free cash flow print generates is still strong even though it's diminished from what it was five years ago. These revenues can fund the change and support it while it's still relatively unprofitable. But those print revenues will, almost certainly, continue to decline. Thus, the clock is ticking.

  8. Unless you were among the rare risk-takers who purchased Gannett stock when it was about a buck a share, $16.24 a share is a pretty meaningless number to all those (well, "all" isn't quite the number it used to be is it?) employees who hold Gannett stock as bonus payment and perks.

    Especially those who "bought in" at $40-$60 a share.

    For those people, Gannett stock is worthless until it exceeds that buy-in number. And we all know that is unlikely to happen any time soon.

    AND, one other dirty little Gannett secret - if you are fired or laid off, you lose all your stock. You can't sell it. Period.

  9. Not quite, 10:19. Anyone who's vested in their 401(k) keeps the Gannett stock match when they leave. Same as those who buy it through payroll savings. You're referring perhaps to execs with stock *options*? Severance terms on those are subject to detailed contracts.

    You don't seem to understand options. There's no "buy-in" in the sense that the exec has to pay anything. If GCI ever tops the option strike price, she uses the option, typically in a cashless exercise. If not, well, it didn't cost anything.

    Many execs got GCI options at $2-$5 a couple years ago, so they are very happy now. Older, underwater options priced at $20-$40? They probably have 10-year lifespans so there's still time.

    A "meaningless number": I stopped selling off the Gannett stock match in my 401(k) when the price hit $2, which was almost 2 years ago now. Every pay period, that match has dumped shares into my account. I'm sitting on a nice gain. Averaged out, those shares have doubled. The sum isn't huge but it's not peanuts.

    Happy investing!


Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

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