Saturday, April 14, 2018
TKC MUST READ!!! INSIDER: KANSAS CITY STAR PARENT COMPANY STOCK THREATENED BY HEDGE FUND VULTURES!!!
Right now we're sharing a BRILLIANT bit of analysis for local media edification and as a reality check regarding the fate of Kansas City dead-tread media as vulture hedge funds target newspapers across the nation.
TKC READER: IS MCCLATCHY (MNI), PARENT TO THE KANSAS CITY STAR, IN-PLAY BY MONEY MANAGERS???
As of 4-13-18 PM, MNI shares sit at $9.29 per share.
In reviewing the numbers , please pay particular attention to the book value per share, and the cash per share listings. Let's define terms:
The term "book value" is a company's assets minus its liabilities and is sometimes referred to as stockholder's equity, owner's equity, shareholder's equity, or simply equity.
"Cash per share" is the percentage of a firm's share price that is immediately accessible for spending on activities such as research and development, mergers and acquisitions, purchasing assets, paying down debt, buying back shares and making dividend payments to shareholders.
In McClatchy's case, you'll notice that the company has a negative book value! More liabilities on the balance sheet than assets. However, it actually appears to have more liquid cash available than what each share is trading for. This is perhaps why the money managers are establishing substantial stakes in MNI stock. So what could they be planning? Well we don't have any insider information to publicly disclose (that would be illegal) but we can make some inferences based on prior activity in past years involving other troubled companies.
Generally, money managers acquiring substantial positions in struggling companies are looking for one of 3 options: 1) putting their people into management for a business turnaround, 2) agitate management to force a buyout of their shares at a premium, 3) seize control and strip cash from the company before defaulting on outstanding liabilities.
Option #1 is probably not their plan, as nearly the entire newspaper industry has been in decline for years. That leaves 2 bad options or something worse.
Developing . . .