Jay Allen Sanford 12:30 p.m., March 12
Copley Sold U-T at Bottom, Whether or Not iPad Rescues Newspapers
Most daily newspaper stocks are up sharply this morning (Jan. 27), partly because the unveiling of Apple's new iPad has uplifted spirits of those in the daily newspaper business. In fact, Apple's Steve Jobs demonstrated how one can read the New York Times on the tablet-size device. Possibly, say optimists, newspapers will regain the advantage of immediacy -- something it has lost to the Internet. New York Times stock is up 2.46% this morning to $13.34.
But here is the point for Copley decision makers. The company essentially paid Platinum Equity to take the paper by selling $100 million worth of real estate for $50 million. The deal was announced March 19 of last year. At that time, New York Times stock was selling for $4.50, so it has nearly tripled during a period in which the overall stock market has gone up much less, or about 60%.
Stocks of other newspaper companies have soared even more dramatically. McClatchy has gone up ten times -- from 57 cents on March 19 to $5.67 today. Following are some prices of newspaper stocks on March 19 (the date Copley announced the sale) to today at midday. AH Belo 92 cents to $6.46; EW Scripps $1.57 to $6.81; Lee Enterprises (owner of the North County Times) 30 cents to $4.35, and Gannett, $2.21 to $15.79.
It certainly appears that Copley sold and Platinum bought near the low for newspaper stocks. Can the U-T cash in from the iPad and similar products? That remains to be seen.