Lee Enterprises, Post-Dispatch Parent Co., Continues Downward Slide

lee-enterprises-stock.jpg
courtesy of Google Finance.
Lee Enterprises' stock (shown in blue) is down 20 percent in the last six months, as this graph shows. Fellow media giants Gannett (in red) and McClatchy (in yellow) have also lost considerable value.

Another quarterly report, another piece of bad news.

That's the woefully predictable pattern coming out of Davenport, Iowa, the home of the St. Louis Post-Dispatch's parent company, Lee Enterprises. As we reported last month, the newspaper company's stock has fallen so precipitously that it's in danger of being delisted from the New York Stock Exchange. The NYSE typically doesn't list stocks that sell for less than $1 per share, as their low value makes them subject to wild swings in value; as of July 1, Lee was trading at 99 cents per share.

Since then, things have only gotten worse. As of today, the company's stock is trading at just 71 cents per share. That's attributable to the stock market's overall poor health (as you can see in the graph above, both Gannett and McClatchy have also dropped over the last six months), but Friday's latest earning report certainly didn't help.

As the third-quarter report makes clear, Lee is continuing to lose ad revenue for its print edition -- and digital ad sales are not rising quickly enough to begin to stanch the bleeding. Even though digital revenue is up 22 percent compared to this quarter in 2010, the company's overall ad revenue is still down 5.6 percent overall.

And, it's important to note, that's 5.6 percent lower than the third quarter in 2010, which was already a pretty shitty quarter. It's not like we're comparing the revenue to the heady days of the aughts.

The looming problem for Lee, however, isn't the day-to-day bleeding. It's the company's debt. Thanks in part to the Iowa company's purchase of St. Louis-based Pulitzer, it has $990 million in debt coming due next April. It had hoped to sell junk bonds to stave off its creditors (and bankruptcy), but it had to scrap the deal when it became clear there wouldn't be investors willing to make the purchase.

This post was edited at 4:30 to correct a wrongly reported number in the final paragraph.
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4 comments
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Vox
Vox

Sure, if all it does it parrot government propaganda and peddle ridiculous missives of multiculturalism, diversity, and White race traitors then it can expect to go under.

Fred
Fred

The Dow is off 10 percent in just five days and you focus on a single stock? I wonder why.

Eric Vineyard
Eric Vineyard

It has less to do with their stock and more to do with the overall trend of a once-great paper going down the tubes, thanks to an irresponsible and severely over leveraged purchase by a company that doesn't know squat about how to run a major-market daily.

Jrrobita
Jrrobita

Think you missed a zero there - that's 990 million in debt at least, depending on how you divvy it up. Lee has been paying down approximately 100 million or more in debt every year for the last few years. If it were only 99 million they'd already be free and clear of it. An informative article otherwise. Thanks, Joel RobitailleHalifax, Nova Scotia

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