Even with the stock trading at a five-year low, The New York Times Co. looks like a bad bet, straining under weak revenue and shareholder unrest.
Last week, tense relations between the Times Co. and its
stockholders reached a new low when clearly frustrated money managers
at normally unflappable Morgan Stanley actually demanded that the
founding Sulzberger family give up a two-class stock system that
effectively allows it to control the company.In a press release, Morgan charged that the company has ignored
calls "to operate the business better and allocate capital more
efficiently." Unlike other shareholder revolts, such as the one that
forced Knight-Ridder to put itself on the block, the Morgan-led putsch
Too bad. Last week, the Times Co.'s shares managed to fight a
rising tide in the market and sink another 2%, closing at $24.48.
"There is no real sign of any short-term catalyst [to boost the
stock]," says Edward Atorino, an analyst with The Benchmark Co.
Last year, the Times Co. posted revenue of $3.37 billion, a meager
2.1% ahead of 2004's results, and far too little to absorb a big 7.9%
surge in expenses. This year, analysts forecast that the decline will
Whether you're rooting for the newsroom or Wall Street, keep an eye peeled on the storm clouds gathering around Sulzberger. There is plenty of ripple effect to this, including persistent speculation that Boston Globe publisher Richard Gilman could be replaced in the not-too-distant future.