By: Mark Fitzgerald and Jennifer Saba
Newspaper stocks rose across the board Tuesday, propelled by Wall Street optimism that the credit crunch might be easing.
Tuesday’s biggest winner was Media General Inc. (NYSE: MEG), closing at $16.00, up $1.98, or about 14%.
The Street apparently liked its acquisition of DealTaker.com, even though so-called social comparison shopping sites are falling out of investor favor — and dissident shareholder Harbinger Capital Partners has been very critical of the company’s digital portfolio.
Joseph Weisenthal, writing in paidContent.org, noted that Media General seemed to tweak Harbinger in the DealTaker announcement by disclosing that another digital property, Blackdot, had more than tripled its revenues in a year and ended 2007 $2.6 million in the black.
Harbinger and Media General are headed for a proxy battle at the Richmond, Va.-based publisher’s annual meeting later this month.
Media General didn’t disclose terms of the DealTaker buy, but it seems the Street is betting it got it cheap. MEG did say that it expects the site to be accretive by before the end of the year.
I totally agree, plus the stick-in-the-eye to Harbinger with the Blackdot only jogged the memory of investors. The move, at least the acquisition, reminds me of E.W. Scripps when it bought Shopzilla. The sites are similar in scope in that they help consumers with comparison shopping, discounts, that kind of stuff. If someone makes a purchase on DealTaker, the site gets a piece of the transaction.
The rising Dow tide — it ended up 393 points, a gain of 3.21% on the day — lifted nearly all boats Tuesday, including Sun-Times Media Group Inc, whose low share price keeps it out of the party on the trading floor. With 15 minutes to go before the end of 4 p.m. EDT trading, the Chicago Sun-Times parent (NYSE: SVN) was trading at 80 cents, up 8 cents, or 11.1%.
The Big Board’s only wall flower was Journal Register Co. (NYSE: JRC). The troubled chain, burdened with papers in places where recession or housing collapse is old news, was trading just before the bell at 53 cents, down 2 cents, which at its low price translates into a loss of 3.6% in value.
For those keeping count, this makes the 20th consecutive day Journal Register has traded below $1 a share.
Strange that Journal Register is the only company getting punished, considering McClatchy and the New York Times also have properties in places getting slammed by the real estate downturn. Need we repeat the states? California and Florida
Over at the Amex, American Community Newspapers (AMEX: ANE) was also missing out on the fun, falling to 76 cents at 2:30 p.m. EDT, down 8 cents, or 10.26%.
A big percentage winner on the day was Lee Enterprises Inc. (LEE), which three minutes before the close was trading at $10.50, up 49 cents, or 4.9%.
Here’s how other publicly traded newspaper companies fared Tuesday:
A.H. Belo (NYSE: AHC) closed at $11.74, up 31 cents, or 2.71%.
Gannett Co. Inc. (NYSE: GCI) ended on the up side, closing at $30.27, gaining $1.22, or 4.2%.
GateHouse Media Inc. (NYSE: GHS) ended on the plus side, closing at $6.07, up 23 cents, or 3.94%.
E.W. Scripps (NYSE: SSP) ended at $42.50, up 49 cents, or 1.17%.
McClatchy (NYSE: MNI) made some gains at the close of market up 37 cents to $11.07.
The New York Times Co. (NYSE: NYT) closed on a up note $19.20 after a 32 cent increase.
Washington Post Company (NYSE: WPO) was up $7.64 to $669.14.