Freudenfreude

Wednesday, March 22, 2006

Long ago in a galaxy far away I used to follow stock charts. I now consider chartists to be akin to soothsayers in that they always have a perfectly good reason for yesterdays prognostication not to have worked out in the manner forseen. One aspect of charting that does seem to work out rather well is resistance (or support) level. It works because the market has built in standing 'buy if price hits' orders based upon breakup or residual values of a given company.

The Moody's warning seems to have punched a hole in the 'floor' value of the NYT. The previous floor was at $26 but as the chart shows, Pinch has succeeded in taking the NYT into uncharted waters.

He has also succeeded in lowering its market capitalization by $1.6 billion - about 35%. There are very few CEOs who have ever turned in this type of performance in a single year. It takes a very special type of board to hold on for a ride off a cliff.

9 comments:

CF said...

Unfortunately his family holds control and apparently they are too rich to care.

David Thomson said...

“It takes a very special type of board to hold on for a ride off a cliff.”

CF is right on target. The Schultzberg family owns the controlling interest. Outsiders are powerless. Pinch can pretty well do what he so desires. He enjoys being adored by the leftist elite and seems indifferent about the New York Times decline. The New York Post’s circulation is growing. I suspect that before the decade is over, it may become the region's dominant paper.

flenser said...

Much of the old media are run more as vanity companies than as business concerns. You don't expect them to soil themselves by worring about filthy lucre, do you?

Skookumchuk said...

Flenser is right. At this stage, it must be like a private railroad car or endowing opera houses or owning a fleet of yachts. The money almost doesn't matter; you are just doing what you most want to do with your money a la J.P. Morgan, "If you have to ask," etc.

Well, the money almost doesn't matter. But it will, soon enough.

Fresh Air said...

Actually guys, public companies, regardless of how tightly controlled they are, must be run for the benefit of the shareholders. There's a pretty good case for ousting Pinch, though I doubt anyone will seriously try it.

Rick Ballard said...

FA,

I wonder if the board has exposure to a stockholder suit. Although the Sulzberger's Class B shares have the rights necessary to elect the board, the Class A shareholders should have recourse regarding malfeasance. The Moody's threat provides some interesting ammunition.

If the board doesn't heed the Moody warning then the rest of the trip down is their responsibility.

Btw - Somebody dumped $10 mil in at 11:50 to stop todays skid - after the stock whent below $25 for the first time.

ex-democrat said...

rick - of interest: http://money.cnn.com/magazines/fortune/fortune_archive/2006/03/06/8370661/index.htm

Rick Ballard said...

ex-dem - I can't find the specfic article. What's the title?

ex-democrat said...

rick - sory about the link; the title is "What Price Knight Ridder?"
By Devin Leonard
February 22, 2006: 11:08 AM EST