Saturday, April 14, 2018


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.



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 . . .


Anonymous said...

Your reader is ignorant of an important facet of McClatchy stock that negates all his dreamy speculation.

But dream on.

Anonymous said...

1:25 Dream Weaver .. Tell us so we can DREAM ON DREAM ON DREAM ON

Graig Clazer said...

Is this why Hearne Christopher, former stockbroker, former publisher of the Pitch, former car salesman from Topeka, former STAR gossip columnist, who got let go and has resented it ever since, blogger with three followers including Craig Glazer and two of Craig's alter egos, is now moving back to KC from Lawrence??

To take over the STAR like Mitt Romney did at Bear Stearns???

Anonymous said...

Ask the Denver Post how that worked out.

Anonymous said...

"The company has two classes of stock, allowing the founding McClatchy family to retain control." - Wikipedia


Anonymous said...

^^^ that imagines that they want to hold on to the company. There are a lot of shareholders who would be happy to make a lot of money and let go of the business.

Anonymous said...

2017 McClatchy Annual Report
Full of doom and gloom language warning that the company may likely fail to hang on.
"Difficult business conditions in the economy generally and in our industry specifically, or changes to our business and operations may result in goodwill and masthead impairment charges.
Due to business conditions, including lower revenues and operating cash flow, we recorded masthead impairment charges of $21.5 million and $9.2 million in 2017 and 2016, respectively. We also recorded goodwill impairment charges of $290.9 million in 2015 and masthead impairment charges of $13.9 million, $5.2 million and $5.3 million in 2015, 2014 and 2013, respectively. As of December 31, 2017, we have goodwill of $705.2 million and mastheads of $150.0 million. Further erosion of general economic, market or business conditions (nationally and in our local markets) could have a negative impact on our business and stock price, which may require that we record additional impairment charges in the future, which negatively affects our results of operations."

Anonymous said...

6:43 comment
Class B insider shares with binding agreement = 1 vote each
Class A public shares = 1/10 vote each

If Class A shares are being accumulated in a few hands (e.g., Chatham holds 1+ million) for short-term profit via agitation, manipulation, etc., it affects the overall sustainability of the company.
Note how many of the current large stake Class A owners are masked offshore entities.

If MNI fails to trade publicly (recall 1:10 reverse split in June 2016) what are the B shares worth?

MNI is like the guy who couldn't pay his bills, and now the debt has been sold to aggressive collectors with baseball bats.

Anonymous said...

Option 3 is the way to go. How many times has it been done with Interstate Bakeries?

Jonsie said...

^^^ Good point.

What sucks is the damage that these corporations are going to do to the The Star's infrastructure and reporting power. The hedge funds are looting compaines and leaving nothing left of the business, hope that is not what happens here.

Anonymous said...

It already has.

Anonymous said...

The star killed itself with the worst reporters on the face of the earth! With a staff of Jenee, snatchez, kraske and helling you get what you pay for and that’s whats gonna close the doors on what was once a shining example of a news paper. The national enquirer is a better news organization

Anonymous said...

Print news is an anachronism in at least two ways. News gathering is now done by individuals with a variety of sources online or by flipping around on cable. There aren't enough people who love the 'look and feel' of newspapers to build a market.

Also, the Star is an ever-shrinking low quality product. It's a one-sided uncritical cheerleader for City Hall. There may be a place for real journalism in KC, but the Star is incapable of it.