Journal Register, a Shakespeare tragedy
In William Shakespeare’s play The Tempest, Prospero the exiled sorcerer frees the spirit Ariel from a tree. In much the same way, Ariel Investments has freed itself from a tree as well.
The Chicago-based investment firm reported in filings with the Securities and Exchange Commission that it no longer owns any shares in Journal Register Co, the publisher of 20-some newspapers in the United States, including the New Haven Register.
Ariel officials declined to comment on why they sold their shares, but perhaps it had something to do with the fact that Journal Register was recently delisted from the New York Stock Exchange after its stock belly-flopped amid a ridiculously bruising advertising sales climate.
Not only that, Journal Register said in a filing last week that it might violate its debt covenant by July 23, 2008 if it doesn’t amend its credit agreement or see a substantial improvement in its business.
Don’t blame Ariel for losing faith in a newspaper company, however. Journal Register’s stock was around $16 a couple of years ago, but recently it has bottomed at $0.16.
In somewhat more stable situations (Tribune Co, McClatchy Co), Ariel has stuck by its newspapers. But in the case of Journal Register, it’s hard to hang on when a stock price has fallen that far and the company could default.