The Slide Continues

Monday, July 31, 2006

In keeping with what has become a cheerful Flares tradition, it gives me great pleasure to announce that on Friday, July 28, 2006 the Class A stock of the New York Times closed below $22* for the first time since early 1997. Junior Sulzberger's unparalleled leadership has succeeded in trimming another $150M from stockholders equity and through his extraordinary talent has raised the total loss in stockholder value to $4.3B since 2002. Given the huge debt incurred by Junior in pursuing construction of a completely unneeded monument to his ego it is doubtful whether the companys parlous balance sheet will continue to support even a junk bond rating for much longer.

Way to go, Junior! Take that puppy all the way down.

*The stock broke through $23 on June 13. Junior is clipping value at a better than $3M per day.

7 comments:

chuck said...

Dive, dive, dive! I hope they spin off the science section before they run below crush depth.

Skookumchuk said...

Rick:

I think in a post of a few months back I said we'd see $20 by Thanksgiving or some such...

Chuck:

Aaaooooggaah!

Rick Ballard said...

Skook,

I believe you did and DT recommended it as a short, too. I don't have the guts for a short play because I know that the day they announce Junior's removal there will be a 20% pop in the price. Adjusted for inflation the stock has increased in value by a stupendous 2.5% annual rate since Junior's ascension.

Helluva manager, Junior is.

CF said...

Meanwhile the family is buying back more and more of the stock (at bargain prices), further assuring Pinch stays at the helm.
Talk about poison pill...

vnjagvet said...

I hope they keep buying it as it plummets. As if they didn't have control already.

Thanks, Rick. This makes me feel better already.

Rick Ballard said...

Vnjagvet,

I keep hoping that the Flares legal team will get together and write an article on the 'hypothetical' liability exposure that Junior has created by publishing the NSA secrets. The penalty portion of 798 looks quite a bit like RICO to me.

A nice spread in AT might be worthwhile as a public service to Class A stockholders who are unaware of the risk that they are taking in holding the stock.

I don't know that Alberto has it in him to go for the gusto but it will be a marvelous show if he does,

David Thomson said...

“I believe you did and DT recommended it as a short”

Yup, I most certainly did. Alas, my financial resources simply do not allow for such a risk, however modest. I suspect that Junior’s family will pull the plug at $17-18 a share. And this is where shorting the stock could be very dangerous! A 20% jump is a near certainty when Junior is finally pushed out of the door. Moreover, a doubling or even tripling the price is possible if the family decides to sell the whole company to outside investors.

Why has the family been so patient? If nothing else, the current losses are only on paper. These folks are still living the good life. Nobody is filing for welfare benefits. In back of their minds, they know that selling the newspaper chain will refill their bank accounts.