It's a little bit apples and oranges, but a reader named Ed makes an interesting comment on one of my earlier posts:
It just occurred to me that this coming Sunday, I have the choice of spending $1 to buy a paper, or $1 to buy one share of a giant and powerful newspaper company. For about $4, in the neighborhood of the price of the Sunday New York Times or the tabloid Barron's, I can buy a share of the McClatchy company that owns newspapers monopolizing the markets of Miami, Fort Worth, Sacramento, Anchorage, Lexington and one that covers the entire state of Idaho.
Alternatively, for the price of about three copies of The Sunday New York Times, you could join the Sulzbergers as owners of The New York Times Co., or buy a share of Media General; for the price of Sunday Times' you could own a share of Gannett; for the price of one Sunday Times you could own a share of Lee Enterprises or Journal Communications—or you could buy a basket of the cheaper newspaper stocks like Journal Register and Sun-Times Media.
That gives you come idea of how far newspaper stocks have fallen–they're not worth much more than the newspapers they represent. But the question is, will those stock certificates wind up as fishwrap?
What makes this doubly depressing is that, even at these low prices, newspaper insiders aren't interested in their own stocks. Look at the insider trading reports filed with the SEC, and you will see that there has been precious little activity this year by insiders voting their support of their companies by buying their own company's depressed stock. Donny Graham sold $8.6 million of his WPO holdings after stepping down, and an equity fund has bought into the NYT earlier this year, but where are the managers of papers like MNI, who are paid very handsomely and should be interested in their own company's stock at these prices? What does that say about the faith they have in the future of the companies they run? I think this whole episode shows the case against public ownership of newspaper stocks has been made, but what I am mystified about what happens to these huge legacy properties. If no one wants them, do they just go quietly into that good night?
Posted by: ed | July 20, 2008 at 05:50 PM
When I retired from Gannett, I asked the financial advisor who rolled over my 401k about how I might buy a Gannett stock certificate. I wanted to frame it, along with the news artist's characture of me and my Best of Gannetts. Because I am invested in "funds" she had no access. I asked the person who does individual purchases of stocks for other investors and he thought I was crazy. Why would I want one, he asked. I told him. His suggestion: Go through the company, maybe you can buy one from them.
So who knows what is being done with all those stock certificates?
Hoarding them in Virginia?
Do any exist?
Posted by: Newspaper Stockless | July 22, 2008 at 06:03 PM
Because stock trading is all-electronic, stock certificates are essentially a thing of the past. Still, you should be able to contact Gannett's Investor Relations department to see if you can get one. You only need to own a single share directly to qualify as a stockholder, so a certificate would only run you about 18 bucks!
Posted by: Mark Potts | July 22, 2008 at 06:08 PM