Here's something you might be interested in.
Union-Tribune employees are walking around semi-catatonic. The company has announced it is looking at "strategic alternatives," which probably means it is up for sale in a miserable market for newspapers. New York's Evercore Partners will assist the company. Evercore also helped Copley Press last year when it sold 15 papers in Illinois and Ohio (seven dailies, two weeklies and six shoppers) to GateHouse Media of upstate New York for more than $380 million, although Copley assumed some liabilities such as debt and certain newsprint contract obligations. When the transaction was completed in early April, GateHouse stock was at $17.92. Last Friday, it closed at 84 cents. The New York Stock Exchange has suspended floor trading on the stock, because it trades below $1.10. The company lost almost $30 million in the first quarter of this year. It has an accumulated deficit of $359 million. Analysts are worried about its heavy debt load. It went public in 2006 at $18 a share and started buying newspapers at a fast pace. It has cut its quarterly dividend to 20 cents from 37 cents, but this means, on paper, it is paying 80 cents a year in dividends when the stock sells for 84 cents a share. The yield is officially listed at 82.5 percent. In 44 years of financial reporting, I cannot remember a yield so astronomical, but it's academic; the yield won't last. The market doubts about the dividend's viability, obviously, and seems to have doubts about the viability of the company itself. That has to worry former Copley employees at those Ohio and Illinois papers. When the deal closed, employees of the former Copley newspapers became employees of GateHouse. GateHouse is 41.9 percent controlled by Fortress Investment Group, a combination hedge fund/private equity group that was once a Wall Street darling. Fortress's stock sold for as high as $24.73 in the last year and is now below $10.
Union-Tribune employees are walking around semi-catatonic. The company has announced it is looking at "strategic alternatives," which probably means it is up for sale in a miserable market for newspapers. New York's Evercore Partners will assist the company. Evercore also helped Copley Press last year when it sold 15 papers in Illinois and Ohio (seven dailies, two weeklies and six shoppers) to GateHouse Media of upstate New York for more than $380 million, although Copley assumed some liabilities such as debt and certain newsprint contract obligations. When the transaction was completed in early April, GateHouse stock was at $17.92. Last Friday, it closed at 84 cents. The New York Stock Exchange has suspended floor trading on the stock, because it trades below $1.10. The company lost almost $30 million in the first quarter of this year. It has an accumulated deficit of $359 million. Analysts are worried about its heavy debt load. It went public in 2006 at $18 a share and started buying newspapers at a fast pace. It has cut its quarterly dividend to 20 cents from 37 cents, but this means, on paper, it is paying 80 cents a year in dividends when the stock sells for 84 cents a share. The yield is officially listed at 82.5 percent. In 44 years of financial reporting, I cannot remember a yield so astronomical, but it's academic; the yield won't last. The market doubts about the dividend's viability, obviously, and seems to have doubts about the viability of the company itself. That has to worry former Copley employees at those Ohio and Illinois papers. When the deal closed, employees of the former Copley newspapers became employees of GateHouse. GateHouse is 41.9 percent controlled by Fortress Investment Group, a combination hedge fund/private equity group that was once a Wall Street darling. Fortress's stock sold for as high as $24.73 in the last year and is now below $10.