Some Needed Good News for Newspapers
It seems that the only time we write about newspapers these day is to write another obituary or speculate on which newspaper is on its last legs. Well, for today at least, the newspaper industry can breathe a sigh of relief as there is news of an investment company that has doubled its stake in one of the most revered names in the industry Gannett Co.
Ariel Investments LLC has increased its stake in the 12.5% . The WSJ reports
Gannett shares leapt 39% on the news, rising $1.06 to $3.75 in 4 p.m. New York Stock Exchange composite trading, their highest price since the end of February.
The large investment elicited optimism toward the company, which has been beaten down amid dire forecasts about the future of its business. Even with Thursday’s gain, the shares are down 53% since the start of the year and well off their 52-week high of $31.14 set last May.
Gannett is staying mum on the deal but Ariel’s portfolio manager John Miller says that the firm sees a lot of the negativity in the larger names of newspapers as an overreaction. Gannett’s biggest brand is USA Today which does maintain a strong online presence. One wonders if the eye of Ariel is looking at the ability to convert to more online than traditional delivery like others are starting to do.
At least for today, the newspaper industry gets a brief respite from the parade of doomsayers. Let’s see what next week holds.