By: Mark Fitzgerald
Two events on the New York Stock Exchange Wednesday seemed to sum up the woeful state of publicly traded newspaper companies.
First, shares of E.W. Scripps, newly minted as a newspaper and local broadcast company, began trading with a three-to-one reverse stock split. To what lofty level did this price-enhancing maneuver raise Scripps (NYSE: SSP) shares? At the end of the day, just $9.31.
Then shares of GateHouse Media Inc. (NYSE: GHS) traded below $1, entering the dreaded penny-stock territory. By the 4 p.m. EDT end of trading, GateHouse was priced at 97 cents — which could get the stock barred from floor trading and even de-listing if it continues to close below a buck.
By falling to less than the cost of one of its Sunday newspapers, GateHouse shares followed three other publicly traded newspaper companies whose stock can be picked up for pocket change. Wednesday afternoon, Journal Register Co. (Other OTC: JRCO.PK) closed at 14 cents; American Community Newspapers (AMEX: ANE) ended at 20 cents; and Sun-Times Media Group (OTC BB: SUTM.OB) would set you back a whopping 35 cents.
It isn’t just these exiles from the Big Board who have anorexic stock prices, though. Of the 13 publicly traded newspaper companies that E&P tracks, just four sell for more than $10 a share, and that’s including the self-described “diversified education and media company” Washington Post Co., whose stock has long traded in the high $500s range. (Washington Post (NYSE: WPO) closed at $578.50 Wednesday.)
It isn’t even certain that the prices of The New York Times Co. (NYSE: NYT) — which closed at $12.59 Wednesday — or Media General Inc. (NYSE: MEG) — going for $11.31 at the end of trading — will remain in double digits after they report second-quarter earnings in the coming days.
Gannett Co. Inc. (NYSE: GCI) seems comfortably in double digits, though its worse-than-expected Q2 report Wednesday had investors hammering down its price by $1.57, or 9.02%, in midday trading to $15.81. It, er, rebounded by the end of trading to $16.57, a 6.73% decline.
Either way, it’s quite a comedown for a stock that in the past 52 weeks traded as high as $55.37.
But then every newspaper company now trading in single digits could once boast of having a grown-up price that didn’t move in big percentage terms by a swing of a few cents. Those days are fading fast, however, and hope of a rebound is slim indeed.
Consider The McClatchy Co. (NYSE: MNI), once a Wall Street favorite that’s ended Wednesday at $5.02 a share. It hasn’t traded in double digits since May 2.
Lee Enterprises Inc. (NYSE: LEE), which closed on a rare up day at $3.37 Wednesday, last saw $10 on April 8. And
GateHouse hasn’t sold for more than $10 a share since Nov. 13, 2007.
The newspaper industry’s strategy of shrinking newsroom and newshole seems not to be helping their shrunken stock prices.