McClatchy Stock Continues Slide: Street Skeptical?

By: E&P Staff McClatchy's shares continued to slide Wednesday, closing at $50.72, down 4.7% from their value before Monday, when thye company announced that it will buy Knight Ridder.

The decline of McClatchy's stock price "says some people don't like the deal," Wall Street analyst Ed Atorino of Benchmark Co., a New York investment firm, told the St. Paul Pioneer Press. There is great "uncertainty" about what McClatchy can get for the 12 KR papers it now plans to sell. But he added that McClatchy Chairman Gary Pruitt "is a smart guy" who has managed big mergers in the past.

The Pioneer Press is one of the papers McClatchy now plans to flip.

Knight Ridder stock closed down 23 cents to $63.99 on Wednesday.

Steven Barlow, who follows the industry for Prudential Equity Group, is "particularly skeptical about McClatchy's ability to make money from the merger," the newspaper noted. He worries that McClatchy is taking on $2 billion of Knight Ridder debt and as much as $3.75 billion in additional borrowings.