New York Times Stock May Be Worth $0 -- Analyst

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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