That mini-plummet in the New York Times (NYT) stock price to 10-year lows yesterday? Yes, in part it was dissident shareholder Morgan Stanley’s 7% stake hitting the market all at once. But it was also something else: a big Bronx cheer for CEO Janet Robinson, Chairman Arthur Sulzberger & Co.
Investors viewed the Times Company’s future as brighter with Morgan Stanley on board, stomping its feet, threatening to force changes. Now that the firm has gotten bored with the Sulzbergers’ intransigence and given up, the market has, too.
Make no mistake: The New York Times Company is in trouble. Not because its paper products aren’t good (they’re great), not because its web sites aren’t good (some of them are great)–but because the company still has yet to acknowledge and deal with the massive threat it is facing from the Internet and the generational and competitive shifts that go with it. (Details after jump).
The Sulzbergers presumably view “meddling” outside shareholders the same way the Dow Jones Bancrofts did: As a threat to “independence” and “integrity.” In reality, the threat is a forced loss of equity value and control–and it’s far more likely to happen if the Sulzbergers ignore the market than if they listen to it.
Annoying Morgan Stanley may be gone, taking some of its bad press with it, but until New York Times management stands up and articulates a clear strategy for dealing with the company’s predicament, the Times Company’s corporate brand (and stock price) are likely to go the way of McClatchy’s.