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The McClatchy Company Message Board

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  • imadeadcat imadeadcat Oct 16, 2007 11:34 PM Flag

    3rd quarter results are horrible and will get worse

    Okay, say that it's not the economy... and except for real estate I tend to agree. The question remains... what is the annual structural rate of decline in the newspaper business?
    2%, 4%, 8%, 10%?

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    • The annual rate of decline is tough to figure out. Take the loss in circulation, the real paid number. Multiply that x $95 per year per copy and you'll have a starting point. That is the amount of annualized revenue from preprints that are lost when companies like Target and Home Depot cut back on spending with a paper due to less paid copies to insert into.

      That is just the preprint part of the equation. Look at every ad on ebay, on craigslist, and other free and low cost classified sites. Those were at one time possible candidates for newspaper ads.

      Look at Monster.com and other sites. Those were gravy high priced employment ads no longer in print. Look at Auto trader and other auto sites, those were one time ads in the newspaper.

      If anyone could put a price on the structural loss I'd be surprised. If anyone thinks that money is coming back, they are mistaken. The newspaper industry is in a death spiral and unfortunately there may be no better day for this industry than today.

      The current real estate situation is just going to get worse, it will take 3-5 years to work off the inventory on the market or coming on soon. Unless the floodgates of immigration are opened, the amount of supply far exceeds the quantity of demand for housing.

      This stock will hit 15 in my opinion, and sooner rather than later. Look for an asset writedown of at least $500 million, which will help with taxes but proves the company made a bad bet on overpaying for Knight Ridder. Most of the papers they kept WERE NOT in California or Florida, so ignore that comment. Their losses are running deeper than real estate, and deeper than the East and West Coast.

      • 1 Reply to newspaper_advertising
      • newspaper_advertising newspaper_advertising Nov 10, 2007 12:03 PM Flag

        As I predicted just 3 weeks ago when the stock was at 19 and change, this stock was heading to 15. I believe the time to buy this is NOW!.

        Take a look at the flush out volume in the time frame from 10-15-2007 through last Monday and you'll see the daily volume at 1 million to 1.6 million per day, twice the average. Ariel and other asset managers have probably cleaned out their closet and dumped this stock, along with the rest of the newspaper sector. Soon the value investors and fund managers will start moving in and pop it up to 22 or 23 by Memorial day.
        Thats a 50% move in 7 months, back up the truck and BUY.

 
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