Tuesday, December 9, 2008

Tribune stockholders flee after bankruptcy announced -- Tribune stock drops 94% in one day

Fitz and Jen:
Tribune subordinated debentures due 2029 (NYSE: TXA) opened at $17.26 -- and plunged as soon as word of the bankruptcy petition broke. TXA closed at $1.07, down $16.92, or an astonishing 94%. There was a real rush to the exits on TXA, with 635,256 shares changing hands -- more than 5 times the normal volume.

TXA has traded as high as $53.34 in the past 52 weeks. It certainly didn't help TXA's case when Fitch Ratings not only assigned a D grade to Tribune's issuer default rating -- but specifically warned holders of TXA that they should expect zero payment in a "distress situation." Precisely, of course, the kind of situation Tribune finds itself in now.
If you listen carefully, you can hear the death rattle of old media.

1 comment:

Anonymous said...

Drudge Report:
AP: -Zell's memo to employees about Tribune bankruptcy-

Zell said: “I want to stress that we will continue to operate our business as usual.”
“Business as usual”- I wonder how many ROTFLMAO e-mail comments arose from that statement? Ah yes Sam, it is good business to continue propping up the walking corpse that is your dinosaur newspaper.

An Anon. blogger wrote, “Zell’s Grave dancer’ plan points to shaky ground.”