I gotta admit I am a little concerned about the recently acquired newspaper business. It is one thing to have them owe you money it is another to think you can run it better. Is this a case of throwing good money after bad, or ego where someone couldn't admit they made a bad move loaning them the money. So now we are going all in owning a bunch of small newspapers. I believe in stick to what you know, senior citizen housing. Why get into this?? I will wait and see for now. I will be thrilled to be proven wrong...
I also was wondering about this new venture out of left field (so to speak) however, they were quoting mind boggling returns on invested capital at their conferences. One is really investing in the ability of the CEO .
Of course when you read the fine print in their presentations you get the usual boiler plate ifs, whats, and maybes. Basically it got NCT out of a 600mm investment in GateHouse that was a losing proposition and turned it into an equity position with significant potential.
There "may" be some real values in the local newspaper business. I live in Orange County CA and the local newspaper Orange County Register and their parent went BK about a year ago… bought out by some smart busy (with no newspaper experience) and the paper is booming… ads pages up up up, larger format and dal focus on local and regional news… don't just say newspapers are a bad business… some opportunities exist if management has some imagination.
Read the presentation on their website. NCT owns 600mm of GateHouse's debt. They are doing a prepackaged Ch 11 bankruptcy in which the debt will be converted into equity. Other debt holders (about another 600 mm) will have the option of either converting their debt into equity, or cash, at 40 cents on the dollar. I'd guess NCT will own most of the company as .40 on the dollar is a pretty good settlement for creditors. Usually more like .10 cents. Based on the companies history I'd not judge this to be a "bad deal" yet. They certainly know what they're doing.
Like most everyone here, this sounds like a bad deal. But remember they told us up front their (management) intentions. The real money people (not us little bitty guys) get 40% on the dollar they invested ( the other way they were going to evenually have gotten nothing) Gatehouse then does a preapproved BR and the new company is formed with the same players and no debt. NCT then does a spin-off where we get 1 for 1 shares of New Media PLUS a dividend. Our new shares will be worth about 3 to 5 dollars. By the end of the year newspapers will not even be a part of NCT and have no effect on senior housing.
I got into NCT just recently, in a relatively small way, but the comments here make me think that people have been favorably impressed with management prior to this deal. Why do you think they are wrong now? If they are right, this is a huge win. If they are wrong, your investment in NCT alone should be a good long-term bet if you bought in the mid-$5's. I share the feelings of uncertainty, but I am going to hold as a speculative bet: 10,000 shares only.
Don't rely on first time posters here (kay59) or resident basher/nut jobs like warcoochiemonster. There are plenty of long time NCT holders here posting informative and well researched information on the company. Follow hanacookie, mreitcmbs, sonnenwayne, and a host of others. The company in the past year has done nothing but promise and fulfill those promises, unlocking the value of their assets and paying an ever increasing dividend. This new venture is taking a dead/ valueless asset (GateHouse Media) and turning it into a performing entity. Management is the best and they certainly know what they're doing. GLTU.
Do a little due diligence about the company ... I suggest you listen to the conference call they recently had on the acquisition. NCT and Gatehouse Media are both operated by FIG (their parent company). They very much know what they are doing.