5 newspaper stocks hit new lows - again
Tumbling to new lows alongside GHS were Gannett (GCI at $16.43 per share), McClatchy (MNI, $4.58), News Corp. (NWS, $13.95) and New York Times Co. (NYT, $12.61). The companies sank to new historic lows on Friday, as reported here.
Media General (MEG) hit a new all-time low of $10.23 per share on Monday.
All the closed higher than the lows they touched in the morning.
GHS took the worst drubbing of all. As its shares fell to as low as $1, its market capitalization sank to some $60 million, which represents a 425% plunge since June 30. "The shares could be worthless," said Morningstar analyst Tom Corbett, as quoted by Editor and Publisher. "Even if GateHouse completely eliminated its dividend, given the combination of its high debt load and our unfavorable outlook for the industry, we think this would provide only short-term relief for equity holders."
GHS is in danger of losing its listing at the Big Board, where rules require a stock to trade about $1.10 a share to remain listed at the exchange. While a company has a certain grace period to restore the value of its shares.
As explained previously here, a stock is not permitted to trade on the floor of the Big Board if it falls below $1.05 a share at any point. Floor trading in a stock can resume at the Big Board if it trades above $1.10 a share for a full day, but a stumble below $1.05 for even a minute will put the issue back in the penalty box. If the minimum price cannot be maitnained, then th company is delisted at the exchange.
Earlier this year, the shares of both Journal Register (JRCO) and Sun-Times Media Group (SUTM) were booted off the Big Board. They now trade on the Pink Sheets, an electronic marketplace that can be accessed as readily by a broker as shares that are traded on the Big Board.