Now we’re not the only ones who think that New York Times shareholders might end up with nothing.
Craig Huber at Barclays does hedge, though: He puts a $1 target on the stock.
Bizjournals: A case could be made that New York Times Co. shares are worth nothing as the newspaper company’s debt load threatens to overwhelm its earnings power, a Barclays Capital analyst said Wednesday.
“Net debt to (operating profit) is way too high,” Barclays analyst Craig Huber said in a research note. “We could argue the stock to zero given the high debt load.”…
Even if the New York Times Co. unloaded its 17.75 per cent stake in New England Sports Ventures (NESV), which includes the Boston Red Sox, for an estimated $150 million after-tax, Huber estimated, the company’s year-end net debt would be 4.5 times EBITDA (earnings before interest, taxes, depreciation and amortization). That’s still too high, Huber said…He cut the company’s stock price target to $1 a share.
Huber pegs the private market value of the Globe at $100 million, a far cry from the nearly $1.1 billion the New York Times Co. paid for the paper in 1993. New York Times Co. bought its stake in NESV in February 2002 for $75 million.
“We view the 17.75 per cent stake in the Boston Red Sox as having among the very best long-term asset appreciation potential at the company, and thus we are disappointed that the company needs to sell it,” Huber said. “… In our opinion, the long-term viability of the company may be at stake, though.”
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