As regular readers of this blog will know, I have a growing soft spot for Stamford. Indeed, we have ‘Project Stamford’ waiting in the wings… http://outwithabang.rickwaghorn.co.uk/?p=75
Which is why the fate of Johnston Press intrigues me. They, of course, are the owners of the last paid-for newspaper in Stamford, the venerable Stamford Mercury, now 20% owned by a Malaysian media magnate.
So Peter Kirwan’s latest post on his PressGazette blog was fascinating… http://blogs.pressgazette.co.uk/mediamoney/
And there is another game worth playing – finding the Johnston share price graph that most resembles a cliff. For my money, the three-month graph isn’t bad…. http://uk.finance.yahoo.com/q/bc?s=JPR.L&t=3m&l=on&z=m&q=l&c=
Six months is good… http://uk.finance.yahoo.com/q/bc?s=JPR.L&t=6m&l=on&z=m&q=l&c=
The two-year chart, however, is just toe-curling… http://uk.finance.yahoo.com/q/bc?s=JPR.L&t=2y&l=on&z=m&q=l&c=
True to Peter’s word, the market – as of 12 noon today (the 12th) – had picked the price up again, a near 18% gain back up to the ‘heights’ of 58.75p; what will be interesting this afternoon will be to see whether his US theory kicks in again and investors Stateside continue to dump the stock…
“This week’s swoon is part of a classic pattern in which hedge funds short the stock and buy nil-paid rights at depressed values. Once this gamesmanship works its way through the system, Johnston Press shares should stage a partial comeback.
“At Deutsche Bank, they’ve also noticed that the share price declines of the past 48 hours tend to accelerate in the afternoon. For what it’s worth, this suggests that US investors are piling out of Johnston Press.
“It would make sense for US investors to be more worried than most about the intensely gloomy economic indicators emerging from the UK…
What’s more interesting-stroke-alarming is his conclusion. And it’s one that, in part, echoes Roy Greenslade’s recent ‘take’ on the provincial newspaper world following Gannett/Newsquest’s recent woes.
“Never mind,” writes Peter. “It could be worse. Today, the FT reported that shares in Barratt Developments, the housebuilder once patronized by Margaret Thatcher, have collapsed by more than 90% from their peak in February 2007.
By contrast, Johnston Press shares finished the day 85% off their 52-week high of 329p.
We’re getting near the bottom. But there’s a way to go yet.
And to Roy’s piece… http://blogs.guardian.co.uk/greenslade/2008/06/us_newspaper_giant_gannett_hit.html
More specifically…
“One factor, of course, will be the length of the property downturn, not to mention the continuing problems caused by the credit crunch and rising oil prices. It will be fascinating to see how Newsquest deals with the looming crisis.
“If Gannett, which has problems of its own, sees its British division as a declining asset, how will it respond? Attempts to sell off regional papers have been notable flops in the past two years, so that option seems unlikely.
“Despite that, I think this current crisis will eventually lead to another round of takeovers, a sort of re-consolidation if you like.”
OK, so that when the market is deemed to have bottomed out, in steps the private equity boys to pick over the bones of what’s left in their traditional fashion? A possibility that Mr Kirwan has just pondered himself…
Because the other point, surely, is that unless you have the untold riches of the Stamford Mercury’s man from Malaysia – http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/15/cnjohnston11.xml – the billionaire Ananda Krishnan, to my mind in these credit-crunched days, it will take a very brave investment bank indeed to oil the wheels of any consolidation deal. For a newspaper group?
‘OK, folks, show me the numbers…
‘OK, we’re outta here…
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I remember reading a good wee while ago a short piece from Jason Calacanis about moving in and buying a local newspaper, didn’t realise it was 2006!
http://www.calacanis.com/2006/08/16/noted/
He’s moved on to new projects now but is an interesting thought.
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