McClatchy, down more than 6% in trading on Thursday, is reeling from a series of bad economic news this week that may indicate the company is in significant jeopardy.
Consider these McClatchy developments since just Monday. On Wednesday, the Fort Worth Star-Telegram announced it will be offering buyouts to employees. Also Wednesday, Alexia Quadrani, an analyst at JPMorgan Chase & Co., said in a note to investors she sees "no signs yet of a bottom." McClatchy's July revenue figures were released this week, showing ad revenue was down 19% and classified ads were down 29% from a year ago. Monday, the Modesto Bee offered buyouts to all full-time employees.
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And last week, McClatchy's Herald-Leader offered another round of buyouts -- the 3rd round this year.
McClatchy seems to be approaching a point of desperation, far beyond teeny fixes like raising the newsstand price or simple cost-cutting moves. McClatchy owns significant real estate in several cities which could raise cash, but real estate transactions can take months or years. Selling some of McClatchy's dailies is unlikely -- who would buy them? Defaulting or delaying debt payments is probably on the table for consideration. Removing CEO Gary Pruitt would be a signal the company is serious about addressing its problems.
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Other McClatchy developments this summer:
McClatchy implements company-wide wage freeze
McClatchy slashes the book value of "Classified Ventures" and its share of Seattle Times
Fitch cuts McClatchy rating deeper into junk territory
McClatchy sells its stake in ShopLocal.com at a loss
Breakdown of McClatchy layoffs by newspaper
4 comments:
Open your eyes Mcclatchy stockholders.
"Removing CEO Gary Pruitt would be a signal the company is serious about addressing its problems".
I just wish they'd fire the lefties that make up all the 'opinion columnists' at my local fishwrap. There is NO other point of view. I won't buy the paper because I won't help pay their salary. When the KC Red Star fails I'd like to hire them all to shovel horsemanure. I know they're good at it.
When do McClatchy shareholders make a move?
When the stock is under $1?
By then it's probably too late.
Let's see, Gary Pruitt loves music and often uses songs in his conferences to emphasize a point...How about the old Johnny Cash standard...Down Down Down in a ring of fire.
Like he played for us at his last vid. conference from the Rolling Stones "You can't always get what you want", so I guess it's coming back to haunt him, Good riddance.
If you are offered the buy out...Take the money and run before it gets worse and we see McClatchy in Chapter 11.
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