What Happens When a Cup of Coffee Costs More Than a Share of The Sacramento Bee, MNI?

 | Has the time come to short MNI? |
May 25, 2016 |

It is no secret that mid-sized major metropolitan daily newspapers are under siege and our very own Sacramento Bee is no exception.

For those who follow such things, a share of McClatchy Company, owner of the Bee and about 30 other fishwraps, or MNI as it is listed in the New York Stock Exchange, is trading at $1.06 a share as of today's closing. The trading range of the MNI over the last 52 weeks is between $0.75 and $1.64.

If declining readership, falling revenues and losses weren't enough, recently MNI announced what could be described as a self-imposed Fight Club-type punch in the face  - a reverse stock split. In order to continue its NYSE listing, which requires a sustainable share price above $1.00, the company announced a 1 share to 10 reverse split. 

Making matters worse for the Bee, the Sacramento Business Journal reported in March that the reverse split would be 1 for 5 shares. Put another way, MNI's share prices faltered in the last two months that executives had to double up on the split, or perhaps more accurately, consolidate the number of outstanding shares which institutional investors generally view unfavorably.

For its 2015 fiscal year, MNI reported a loss of over $300 million. With analyst estimates showing a continued sea of red ink in their forecasts, those with the money and  moxie might want to watch the movie The Big Short and test your skills on profiting from what looks to be the continued degradation of MNI's stock price amidst an uncertain future.   

Click to enlarge. 

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Ace of Spades said...

And as if that isn't bad enough, the increased use of weed pesticide is wiping out the bees!

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