Remember last week’s post about the stock decline in A.H. Belo, the parent company of Dallas’ Only Daily Newspaper? Well, things got worse by the end of the week.
Belo closed at $6.70 on Friday, a 4.42 percent drop from the day before, and it was as low as $6.45. A little perspective: In February, when Belo split into newspaper and TV companies, the stock price was as high as $16.35. In other words, Belo’s market capitalization has declined by almost 60 percent, and its market cap is just $137.2 million.
No one I talked to is quite sure why Belo is underperforming many of its peers. Yes, the economic situation isn’t good, and newspapers are slumping, but this decline is something else. Even the industry’s trade journal noticed. Meanwhile, The New York Times Company is only down 39 percent from its 52-week high. Gannett, which publishes USA Today, is also down 60 percent, but it wrote off $3 billion in assets earlier this month.
One possibility for the collapse is Goldman Sachs analyst Peter Appert, who wrote Thursday that things are going to get worse, and they’re already worse than many experts expected. ""Nothing on the near-term horizon to alter our long-held view that investors should remain underweight on the sector," he wrote.
Which is analyst-ese for sell as fast as you can, which is apparently what happened to Belo last week.