Gannett announces furloughs

Let me take a guess. You?

 

$GCI closes at .9651 per share... Lost 77% of value in the last month...

 

And on 3x normal volume today! Smart money is rushing to exit before bankruptcy.

 

Truth be told (and it was an unpopular take when I posited it back in the furlough heyday), I would take a week completely unplugged over a career completely unplugged. However, I will admit to having alternate sources of income.

 

GCI stock down in the .80s.

 

Just out of curiosity, why would you apply for unemployment for one week out of a month? Especially if you're hourly and you can spread the days out instead of a one-week chunk?

 

From my Gannett past, when regular furloughs were a thing and there was a one-week waiting period, it was smart to take it a week at a time and apply, so you after that first week, you could get some relief with unemployment compensation for any subsequent furlough weeks the rest of the year.

Instead of 5 days unpaid for every quarter, you could get a few hundred dollars for every unpaid week in every quarter.

 

Not allowed to spread the days out. Have to take a one-week chunk.

And you file for unemployment because it's an entire week of pay you no longer have. How many families just lost their entire budget for groceries, the electric bill, the water bill? How many people just lost the ability to cover their mortgage or rent?

Most Americans don't have thousands of dollars in reserve, including journalists. So when someone loses 25% of their income a month, they have to file for unemployment just to stay afloat.

 

You file for unemployment because its your right. You pay into the system and when your company cuts your hours you deserve to get some back. Also so its on record your company is doing this to you; some states would make their payroll tax higher based on how many claims they have. A furlowing company should feel that.

 

Could someone a little smarter than me try to analyze the implications of this drop? The stock is down 80 percent in one month.

Often the CEO’s have defended the sliding price by arguing it wasn’t trading on fundamentals. We know what’s causing this drop and that situation isn’t going to improve for months.

Are we looking at bankruptcy, hostile takeovers, 50-80 percent layoffs?

 

I seldom post on here, usually opting to just read. As a former Gannett employee who has a pretty good understanding of finance and securities, I'll give you my opinion.

Going back to Nov. 19, 2019, the day the Gannett/GateHouse merger closed, the stock was trading at 6 and change. The big questions facing the corporation post-merger were: Could they service the debt used to effect the merger, considering that it was taken on at junk rates, amid declining ad revenues and a sustained inability to build a digital subscriber base? And, could they maintain the dividend?

It held mostly steady until Feb. 19, when it began the dramatic decline towards delisting territory. In the last month, the company announced that advertising revenues were declining much faster than they had previously predicted, they still weren't adding digital subscribers at a sufficient rate, and that they were suspending the dividend.

The Gannett/GateHouse merger is vaguely reminiscent of the merger of the Pennsylvania and New York Central Railroads. Both had bad financial outlooks resulting from years of bad management. Both were saddled with huge debt loads. They thought that by combining, there would be, to use a word that Gannett suits love, "synergies" that would save the business. Instead, the Penn Central was bankrupt just over a year later, forcing a total reorganization and government bailout of northeastern railroading, and an eventual deregulation of the industry.

Gannett is headed for bankruptcy and fast. What emerges from the bankruptcy process is anybody's guess. Maybe some properties will be purchased by civic-minded folks in the local markets. Maybe Gannett/GateHouse has already poisoned the well in the local markets to the point that the paper's brands are toxic. It's going to be bad for journalism, and it's going to be bad for the country.

That said, it'll be nice to see some of the asshole suits file for unemployment, they who were so proud of themselves for clawing their way to the top of the masthead, playing political games, stabbing talented colleagues in the back, telling people who worked 90 hour weeks that they didn't work enough, that the Sports Department is all fun and games, that we're easily replaceable, that "we have to cover local stories" except when they'll have to report to Tyson's that aren't making their numbers on ChartBeat, that never worked a night or weekend or holiday but wouldn't hesitate to call you and in couldn't be bothered to thank you - yeah, that's going to be nice.

 

I don't think we're related, are we?