PrintOctober 17, 2007
Major shareholder bailing out of the New York Times (updated)
The decline of the New York Times as a reputable newspaper has been matched by the decline of its business management. The running (or running down of the newspaper) by "Pinch" Sulzberger, descendant of the family which had purchased and remade the paper generations ago, has progressively destroyed the value of the Times (the apple does fall far from the tree-especially after several generations). The paper has suffered disproportionably more than its peers on the stock market. It suffered another indignity this morning.
A huge block of shares was sold early this morning off the New York Stock Exchange. This source of these shares is probably Morgan Stanley, where activist fund manager Hassan Elmasry has been pressuring management to undertake changes at the company to boost its plummeting stock price. He has been stymied by the dual-class stock structure of the corporation, which grants to the Sulzberger family super-voting rights that have protected the position of Pinch. In any other corporation subject to the viscidities of value creation and destruction, he would have lost his job years ago. Instead he has been coddled and shielded from shareholder activism.
Today, in the face of a stock market that has been hitting all-time highs, the New York Times (stock symbol: NYT) opened at a brand new 52-week low.
Now, that is some news that is fit to print.
Update: Rosslyn Smith writes:
My first reaction was that Morgan Stanley has concluded that Pinch should have been kicked upstairs to a purely ceremonial role by now. If the family was functioning rationally, he certainly should have been. Since the family hasn't taken action even with competition from Murdoch looming, MS probably decided the stock price is going nowhere but down and that no suitor is on the immediate horizon.
