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.