I was reading a Forbes article about the distressing state of some of the worse-off U.S. newspaper publishers and how their debt threatens to send them into default, or worse yet, maybe out of business. That’s when I came across this distressing nugget:
The problem may be particularly acute for players who have concentrated on acquisitions in the last few years. For instance, Journal Register Co. (nyse: JRC - news - people ), whose stock was delisted from the New York Stock Exchange this year, bought nothing but trouble when it paid $415 million in 2004 for 21st Century Newspapers, a chain of Michigan papers that have been battered by a troubled U.S. automotive industry.
The company now has $642 million in debt and a market cap of a just $275,000 (not a misprint). It’s rated junk by Moody’s. Journal Register did not return a call for comment.
I recalculated Journal Register’s market cap this afternoon, when it closed up 16.67% to 7 cents a share. (Reader Dan points out my goof. Journal Register closed up to 0.7 cents a share. Which proves my point, of course — My house is worth more than Journal Register. — RM) By the figures we have available to us, that puts its value at about $2.8 million. Then I ran the calculation again, this time based on Journal Register’s 12-month low price of $0.004 cents a share. I came up with $157,440. That’s when it hit me: On that day, Sept. 26, 2008, Journal Register was worth about half as much as Zillow says my 980 square-foot two-bedroom 1.5-bathroom house in Jersey City, NJ, is worth.
The big difference? Journal Register has payroll. I have only a cat.
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This happened with ENRON, at one time you could have purchased $1000 of ENRON stock, and $1000 worth of beer, then drink the beer till ENRON tanked, sold the empty cans and made more money than the originally $1000 worth of ENRON stock.
So I stuck to BEER.
- Posted by Rick James[...] Reuters calculated that based on the Journal Registers 12-month low price of $0.004 cents a share, the company that owns the New Haven Register is worth $157,440. The average home price in CT is $338,772. [...]
- Posted by » Blog Archive » Is Your House Worth More Than The New Haven Register?Just for the record, JRC stock hasn’t been worth 7 cents in months. It did crest briefly back up to .7 cents, or .007 dollars, per share on Oct. 2. That was but a mere moment of glory, however and the price quickly retreated back below .6 cents on Oct. 3.
- Posted by DanThe same mentality of greed and short term thinking that is now destroying financial markets is responsible for the speedy demise of Journal Register. While acquiring properties and stripping staff to artificially inflate profits (no capital investment and declining revenues - as in just about all print media) chief executives Bob Jelnik and Jean Clifton and their crew of cronies (many of whom also sat on the board) rewarded themselves with large bonuses and walked away with obscene retirement packages when the road got rocky, leaving the employees (people who actually do work) holding the bag. Maybe we should ask the taxpayers to bailout Journal Register too! It is quite obvious at this point that the deregulation craze that ramped into full swing with Ronald Reagan’s presidency simply doesn’t work. You can’t trust the kids to mind the candy store.
- Posted by chuck g.JRC has made one bad decision after another. They own a network of internet job boards http://www.jobsintheus.com that according to their financial records is the only profitable entity in the entire JRC portfolio. Yet within 12 months of purchasing that company they entered into a partnership with Yahoo Hot Jobs which competes directly with the company they just purchased. Based on that judgement should anyone be surprised by this meltdown?
- Posted by FrankieDid JRC build that job site and then partner with Yahoo! Hot Jobs so they would buy that part of the portfolio. I find it funny that newspaper companies who drive the misery reporting that sells their own papers are having a hard time staying afloat. Do companies like this put themselves on the cover of their newspapers when things go south?
- Posted by How Much Is My House Worth?