Meet Eugene H. Gardner, Jr., a partner at Gardner, Russo & Gardner. His company owns 5.2 million shares of McClatchy stock. Last year, Gardner peered into the future and decided to stick with MNI, betting the stock would improve. Here's what Gardner said in 2007:
"I would view the stock as significantly undervalued."
When Gardner said MNI was "undervalued," it was hovering at $16.50 a share. Which means his company's MNI stock was worth over $80 million, if my figures are right. Today, MNI is well under $2 a share -- and could turn out to be worthless.
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Heckuva move there, Eugene.
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8 comments:
Yes, and consider the trust that Pruitt just resigned from. All those heirs and their kiddies are heading for the breadlines.
The question is, will they remain entrenched in a losing cause? It is kind of funny really. If you simply talked to the peons, instead of the "experts" selling MnI and shorting it was a no brainer from day one. As it is, Ariel was actually increasing their 15 million shares as recently as June of this year. Well after the time it became clear to even the dim bulbs and cheerleaders the individual papers employed.
There is no chance that McClatchy can come back. They fail to realize the link between lost readership and lost advertising. They do not even comprehend that alienating half or more of their potential viewers with their slanted content, cripples their ability to draw advertising, even though major advertisers such as walmart discontinued their regular inserts long before any hint of economic strife was realized.
What was their solution? Double, Triple advertising rates and be amazed at how the timing has hurt there business. Never once even considering that, "They are the problem that they have been running from"
He resigned from the trust so he couldn't be sued for funneling cash to it. There isn't a McClatchy tinkerbelling around San Francisco that is going to give up their caviar.
He resigned from the trust because, as a lawyer, he realized he could be charged in a suit with violating his fiduciary trust if he continued to follow unsound and reckless policies that have led to MNI's financial ruin. It will eventually come to a point where Pruitt is going to have to ask the board of directors to scrap the dividend, which benefits heirs holding interests in the trust. That amounts to a conflict of interest. The policies he adopted already ruined this company before the recession hit, so I think Pruitt could still face a lawsuit before this is all over. Look at the 3 year stock chart and it's clear the downturn for MNI began long before the downturn of the economy.
Does Gardner still hold MNI? According to this Web site, it does not appear to be among his major holdings:
http://www.tickerspy.com/member.php?mid=-860643&pid=18546
I would not be surprised to learn he recently dumped his MNI. As someone already noted, that Morningside report makes holding MNI similar to holding a nuclear reactive rod. Investment firms that hold MNI from now on face lawsuits for violating their fiduciary duties by making clearly foolish investments.
I meant Morningstar.
Yes, Gardner still holds 5,199,180 shares after selling 2,145 in the third quarter.
Of course with Mutual Funds you only know what they are actually holding on the day that they report their quarterly earning. They are free to adjust their holdings after that without ever notifying anyone, or disclosing it to shareholders.
There's a sucker born every minute!
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