Newspaper stocks surged this week, something few industry watchers expected.
Among the winners: Gannett, up up $1.73, or 17.3 percent; Lee Enterprises, up 48.1 percent; Media General, 9.3 percent, and Scripps, 8.8 percent.
For those of us who love the news and newspapers, let’s hold the champaign. Investors are notoriously fickle, and the media companies have devastated their newsrooms for short-term bottomlines that will soon evaporate. If the stock prices hold, the companies no doubt will be in a much better position to restructure their debt. That’s good.
But, having sucked out the core of their businesses, they now find themselves with few places left to cut and a business model that continues to languish. For instance, Gannett achieved its improved cashflow through consolidations and lay offs, not through increased revenue. Check out the official corporate line here.
Still, the stock surge does indicate one thing: Investors still see value (at least some) in the venerable brands. And that only bodes well for the ongoing transition to the a new journalism paradigm.