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Stock Ideas Investors Daily Edge Closing The Gate On Community Newspapers
Stock Ideas Investors Daily Edge Closing The Gate On Community Newspapers 
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Brass Bulls by J. Christoph Amberger, President, Taipan Financial News It never ceases to surprise me how dead and deserted Manhattan’s Financial District looks like on a weekend, especially a holiday weekend. |
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| Closing The Gate On Community Newspapers |
| Friday, 24 October 2008 | ||||||||
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Two years on the NYSE and out. That's GateHouse Media's tale of public-life woe. GateHouse, one of the nation's largest publishers of community newspapers, will be delisted from the New York Stock Exchange before the market opens this morning. The delisting comes just two years after it made it to the Big Board. The beleaguered chain tried to stave off the action when it filed a business plan earlier this month. The plan included continued suspension of once-rich dividend payments. But the stock exchange's regulatory arm, NYSE Regulation Inc., said "the abnormally low price of the stock makes it appropriate" to suspend trading in the company's common stock rather than give the plan a chance to succeed. The stock hasn't traded above $1 a share since July. It fell 2 cents to close at 16 cents Wednesday. That's down from $20 a share on its first day of trading in October 2006. Under the Big Board's listing requirements, stocks that trade below $1.05 over a 30-day average, or fall below the minimum market capitalization of $75 million, risk delisting. Based in the Rochester suburb of Fairport, GateHouse Media owns 97 daily newspapers, 400 other publications and 260 related Web sites reaching more than 10 million people in 21 states. It is the third newspaper stock to be delisted by the New York Stock Exchange this year after Sun-Times Media Group and the Journal Register Company. A fourth newspaper outfit, American Community Newspapers, is taking steps to keep its listing on the American Stock Exchange. Upon delisting, the company said it expects its common stock to trade in the over-the-counter market under a ticker symbol yet to be assigned. Hedge fund manager Fortress Investment Group bought Liberty Group Publishing in 2005 and took it public in October 2006 as GateHouse Media after moving its headquarters from the Chicago region to upstate New York that summer.
GateHouse bucked recent custom by acquiring community publications mostly in small towns where local newspapers have proven much more profitable than in cities. Its stock was hammered as investors came to believe the company took on more debt than it could handle and was paying a too-generous dividend from its free cash flow.
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