Thursday, October 10, 2013

Stock | Reader: Why have GCI shares fallen 10%?

With less than two weeks before Gannett announces third-quarter financial results, the company's shares fell again yesterday, closing at $24.39, down 72 cents.

That prompted Anonymous@12:36 to ask: "Any speculation on why GCI shares have tumbled about 10% in the past week?"

Anonymous@2:09 replied: "Could it be the government shutdown and the looming possibility of loan default?"

That, 2:09, might make sense if the overall market had fallen by about the same amount, or if other newspaper publishers had similarly fallen that much. But they haven't. In fact, GCI's recent performance has been far worse.

GCI's last intraday high was $27.04 on Oct. 1. That was a week after Belo shareholders gave a formal OK to Gannett's $1.5 billion takeover of the TV company -- a deal that had already propelled GCI's stock after it was first announced in June.

But since Oct. 1, GCI has been trading down.

Comparing numbers
Here are yesterday's closing prices for three other newspaper publishers plus the widely followed S&P 500 index, and the change in prices since their Oct. 1 intraday highs:
Circling back to 12:36's question, why did GCI perform so much worse than the others? Two possibilities come to mind.

Investors may have sold to grab profits after the Belo-driven climb; after all, GCI is still up 36% from a year ago.

Or they might be fretting about Gannett's third-quarter results, which are scheduled for release Oct. 21. Wall Street stock analysts already expect a poor quarterly showing, and only see things getting grimmer during the fourth quarter.

And yet, the seven analysts tracking Gannett forecast shares will go higher. On average, they see GCI rising to $28.64, according to consensus estimates gathered by Thomson Financial.


  1. It's the shutdown, Jim. The Belo merger is frozen. No other media company (except Belo, of course) has a deal like that in place.

    You keep trying to sell the garbage that people who aren't in the know bring in here. You wreck your own credibility by doing so.

    1. I didn't say the Belo merger wasn't an issue. I said Wall Street is worried about the third-quarter report, because that brings Martore's update on the outlook for the fourth quarter. And that's where the Belo deal comes into play, because it was supposed to close by the end of the year.

    2. Of course, if Martore and her ilk spent less time egging on the suicide caucus in the House, there might not still be a government shutdown.

    3. 12:35 AM - Your soapbox, but so much for the policy of censoring extraneous partisan commentary.

      Awfully shrill and grumpy these days, aren't we?

  2. Correction -- TV station acquisition, not merger.

    1. It's actually a merger from a technical standpoint, as Belo will be merged into a newly formed subsidiary of GCI.

      I've been pretty mind-boggled at all the falsehoods and witch hunts on this blog (cruise stories, anyone?)... but don't offer a correction that isn't... correct.

    2. In a company dominated by female managers, you perhaps shouldn't use the term "witch hunts." lol

  3. Get a grip, people. The broad market is down about 5% from last month's record. It is still up double hockey sticks this year. Despite the 10% drop, Ganne

  4. Tt is up over 42% the last year.

  5. Meanwhile, back here on Planet Earth ...

    Our Q3 sucked wind, even with the RIF savings thrown in. To call Q4 soft would be a compliment (trending minus-12% yoy, minus-about half that to budget).

    Q1, can't think about that now, packed a nice lunch and it will be ruined if I do.

    We are in big trouble here.

  6. Jim, original 12:36 here. My inquiry really was just a spontaneous reaction to seeing GCI shares fall. Was wondering if I had missed something, since I hadn't visited the blog since the last round of layoffs. Kudos to you for taking that simple question and parlaying it into a robust exchange among Gannett folks, of which I am not one.


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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