Wall Street: Newspaper Stocks are Junk

(MoneyWatch)  Decades of writing about companies and industries have taught me that, in general, it is wiser to ignore what is going on in the stock markets than to comment on it. Stock prices rise and fall much like the tides; even worse, they are mainly about the future, not the present, reflecting the speculations of those who prefer to gamble about tomorrow, as opposed to those of us trying to analyze what is actually happening today.

Therefore, the markets and their adherents are largely antithetical to the work we journalists believe we attempt to do, in documenting our theologically correct "first rough draft of history," which is one of the most cherished cliches we have used to justify our existence.

Regardless, I always break my own unspoken rule about ignoring the stock markets when an entire industry's fortunes appear to be rising, or falling. This happens when the normal movement of tides is replaced by a tsunami of evidence that investors have either gotten extremely excited about a sector or have lost confidence in it entirely.

Today, by the time the U.S. stock markets closed, it became clear we had reached one of those sea changes, when a summary of stock prices for our major newspaper companies did indeed reveal a story that needs to be told.

I was otherwise occupied (touring a museum with my 12-yeaar-old son) when this particular new low for the U.S. newspaper industry was reached, so I am indebted to the wonderful Fitz & Jen blog hosted by Editor & Publisher, for bringing today's historic moment to my attention.
By Wednesday's end, no newspaper stock on the Big Board was valued as high as $5 a share, save for the reliably triple-digit Washington Post Co. (NYSE: WPO). Falling below this level is significant, because institutional investors usually dump stocks that can't sustain that price, which of course will further tighten access to credit just when these companies badly need it to survive.

Gannett closed at $4.75/share; Lee Enterprises at $0.29; The New York Times at $4.79; McClatchy at $0.66. The only big media company that still has investors' confidence is the Washington Post, although that is because its holdings are now mainly in other sectors than media.

Today, therefore, is a day to bookmark in the history of U.S. newspapers. (Suggestion: You might want to choose "R.I.P." as the most suitable folder name for this material.)