|
How Can The New York Times Be Worth So Little?
On Wednesday, New York Times Co. (NYT) reported disappointing second-quarter earnings, and on Thursday the stock continued in its steep descent. At the end of trading it stood at 12.48, or virtually half the price it commanded one year ago.This part of the story is unsurprising, given how the Street is slamming any newspaper stock. What's startling is something else: If you back out much of the rest of the company's portfolio, you arrive at a surprisingly teeny valuation for the vaunted New York Times itself, despite all the respect the brand commands. At its current $12.48 stock pricedown 46.3% from a year agoTimes Co. has a $1.79 billion market cap. To put this in perspective, CBS recently acquired tech publisher CNET, a much weaker media brand, for $1.8 billion. Add in the company's $1.1 billion of debt, subtract $42 million for its cash on hand, and the company's total enterprise valuea valuation measure that totals up those items in such a fashionis just $2.85 billion. In a research note published on July 9, Lehman Brothers (LEH) analyst Craig Huber estimated the Boston Globe and the 14 regional newspapers the company owns could be sold for $575 million after taxes. Huber valued the 17% stake in the Boston Red Sox, after taxes, at $152 million and the Times's portion of its new headquarters building in midtown Manhattan at $750 million after taxes. The company paid $410 million three years ago for Web property About.com; according to an estimate by tech blog Silicon Alley Insider, that could be sold for approximately $600 million today. That sounds low to us, since About has consistently reported increasing revenues. Let's conservatively kick that up to $700 million and assume a 20% tax bite on the Times's $290 million gains in that sale, which is $58 million. So $642 million, aftertax, for About.com. Totaling up those figures gets you to just over $2.1 billion. Subtract that from the enterprise value, and you get $750 million for the company's remaining assets. Does anyone really believe that Times Co.'s other assetsThe New York Times, the International Herald Tribune, and its New York City radio stationcould be worth only $750 million? Posted by: Nimble Spemble 2008-07-26 |
| http://www.rantburg.com/poparticle.php?ID=245255 |