Tuesday, February 3, 2009

Gannett stock declines below $5; calamity coming

Former USA Today and Gannett investigative reporter Jim Hopkins continues to provide insightful analysis of the approaching fall of the newspaper giant chain.

His website, www.gannettblog.blogspot.com, has become a nemesis of the company's bad executives and an attraction to readers worldwide. The bad corporate execs and bad managers at its newspapers such as The Tennessean hate him for knowing what they're up to and reporting it to employees -- who are being betrayed and their families put at grave risk.

There are good publishers and execs and editors at Gannett. Craig Moon and Rick Jensen are at the top of the list. They suffer for the wrong of others as they watch the company fall. These are good journalists, managers and men.

But they cannot control the decline nor the poor execs and managers driving it. Their numbers are too many, particularly at The Tennessean.

Today, Gannett stock fell below $5 per share while the Dow rose by more than 100 points, signaling the direction of all the markets in general.

Consider that I used Gannett stock in 2001 to avoid the general market downturn. Gannett traded up during that time to more than $80 per share while the general market and mutual funds shed 15% to 20% of their value. So I put all the money of my 401k and that of my wife in Gannett stock.

Here is Hopkins' analysis:

Gannett's stock has just closed at $4.96 a share, a critical level that could spur mutual funds and other big investors to dump it from their portfolios, risking further decline. Such institutional investors own most of the shares, and are prohibited by their charters from holding stock worth less than $5.

The new low pushes the dividend yield up to 32%, pressuring the board of directors more to cut the payout -- a possibility Chief Financial Officer Gracia Martore (left) warned about Friday, during the fourth-quarter earnings conference call.

"Every company globally is very focused on conserving debt, conserving cash,'' Martore told Wall Street analysts, according to Seeking Alpha's transcript. "I think that you will find that we had to look at the dividend back in October and I think that the board wisely wanted to see what the impact of a burgeoning credit crisis and more difficult economic conditions would bring."

Martore continued: "We will -- the next time the board has to act on the dividend is in February and I know that there'll be significant conversation around that. In the context of where credit markets are, where the economies are and where cash conservation comes into play across the country. So we will take that up with the board again in February and we will act appropriately."

With today's close, Gannett's stock is now down 86% from a year ago vs. a 39% decline in the S&P-500.

1 comment:

Anonymous said...

This is an easy one. It's because they don't report the news.