November 21, 2008

Worse Than Worthless: Market Negatively Values the New York Times Company’s Flagship Newspaper

In other words, they would have to pay you to take what is rapidly becoming Manhattan’s quaint little alternative newspaper off their hands.

Yesterday, New York Times Company stock closed at $5.72. That is, by far, its lowest close in the 22 years presented in this chart at Yahoo!:

NYT Chart

Before today’s opening bell, the company is worth $822 million,

Using conservatively adjusted numbers from a hysterically titled July 25 Business Week article about the company (“How Can The New York Times Be Worth So Little?”), I will show that the market currently sees the New York Times newspaper as literally being worse than worthless.

Here are the two key paragraphs from Business Week’s original “analysis”:

In a research note published on July 9, Lehman Brothers (LEH) analyst Craig Huber estimated the Boston Globe and the 14 regional newspapers the company owns could be sold for $575 million after taxes. Huber valued the 17% stake in the Boston Red Sox, after taxes, at $152 million and the Times’s portion of its new headquarters building in midtown Manhattan at $750 million after taxes. The company paid $410 million three years ago for Web property; according to an estimate by tech blog Silicon Alley Insider, that could be sold for approximately $600 million today. That sounds low to us, since About has consistently reported increasing revenues. Let’s conservatively kick that up to $700 million and assume a 20% tax bite on the Times’s $290 million gains in that sale, which is $58 million. So $642 million, aftertax, for

Totaling up those figures gets you to just over $2.1 billion. Subtract that from the enterprise value, and you get $750 million for the company’s remaining assets.

Here are estimated adjustments to the components just named for today’s market realities:

  • Boston Globe and regional newspapers — cut July’s $575 mil by about half; call it $280 mil.
  • Boston Red Sox — Despite the economy, there is little sign that sports franchises are declining in value, especially a marquee property like the Red Sox. But to be conservative, knock the original $152 mil down to $140 mil.
  • Despite the real estate slump, the NYT headquarters building’s value probably hasn’t suffered all that much in four months. But I’ll knock it down anyway (figuratively) by 20% from $750 mil to $600 mil.
  • The original valuation at $642 million by Lehman’s Huber goes a long way towards explaining why Lehman is where it is: in bankruptcy. The Times vastly overpaid for, which is a collection of advice and information sites that are hardly, if at all, unique. I’m going to go hyperconservative on this one and assume that is about …. worthless.

Even with a very conservative set of assumptions, that leaves the rest of The Times Company — the flagship paper, the International Herald Tribune (IHT), and one TV station — as having a negative worth of $198 million (+$822 – $280 – $140 – $600). Since the TV station could probably sold at a positive value, this means that the company would probably have to pay you an absolute minimum of $200 million to take its flagship paper and the IHT. Going to more moderate assumptions on the company’s other components would quickly increase the estimated negative valuation to $500 million.

There’s a steep price to pay for insufferable bias, and NYT’s shareholders are paying it. Yours truly and many others saw deep trouble ahead for the Times as early as the summer of 2005 if the paper didn’t stop its Bush-deranged, standards-compromised march towards the cliff.

They had their chances, but nothing changed. Now the precipice approaches.

The market is telling the company’s shareholders that they’d be better off hanging on to the Red Sox and their interest in the headquarters building — and shuttering or selling off whatever they can of everything else.

Cross-posted at


UPDATE, 12:55 PM: NYT stock is down another 10% today, lopping another $80 million off the company’s valuation.

UPDATE 2, 2:25 PM: Sometime during today’s trading, NYT was below $5.

January 7, 2008

Couldn’t Help But Notice (010708)

Covering further Chinese clampdowns on the Internet, and following up on 2007 predictions made at the end of 2006 by Forbes’s Rich Karlgaard and Biz Weak:


June 1, 2007

ISM’s May Manufacturing Report Rocks On

Filed under: Biz Weak,Business Moves,Economy — Tom @ 10:05 am

Always accentuating even the slightly and/or potentially negative, here’s what AP, in an unbylined article at Biz Weak’s site, had to say about the impending Institute for Supply Management Manufacturing Index for May earlier this morning:

Wall Street is not anticipating signs of more robust U.S. economic growth when an index of May manufacturing activity is released Friday.

Economists expect the Institute for Supply Management’s May manufacturing index, scheduled for release at 10 a.m. EDT, to decline to 54, from a 54.7 reading in April, according to Thomson Financial. A figure above 50 indicates the manufacturing sector is expanding. also said expectations were for a reading of 54.

It came in at 55.0, going up a bit instead of down. Ahem, AP — That would be a sign of (slightly) “more robust economic growth.”

The index is on the verge of some impressive records. Stay tuned in coming months.

May 21, 2007

Positivity: Finally, a new face for young Hamoody

Filed under: Biz Weak — Tom @ 5:56 am

From Seattle (don’t miss the slideshow at the link; HT Michelle Malkin):

Sunday, May 20, 2007

On the day Muhammed “Hamoody” Hussein was to get his new face, he begged for a fast ride in a wheelchair, shot a toy cannon down the hall and professed his adoration for the hospital receptionist.

“I love you!” the blind Iraqi boy told hospital admissions clerk Paula Royal. “Are you sure?” she asked. “What shall I call you?”


Eight hours of surgery and many unexpected difficulties later, Hamoody is now in critical condition in the intensive-care unit, having taken the first step toward a new life on Friday.

What was destroyed by a gunshot in May 2005 when his family, who are Shiites, were ambushed by Sunni insurgents, was partially restored by the skilled hands of Drs. Joseph Gruss and Craig Birgfeld — who donated their time — at Children’s Hospital & Regional Medical Center.

It was a yearlong wait for the big day to arrive.

Last May, Hamoody was brought from Iraq to the Seattle area by the Everett chapter of the national nonprofit Healing the Children, which matches children in need of medical care unavailable where they live with doctors and hospitals willing to donate it. He was placed in the Snohomish home of Randy Smith and Julie Robinett Smith, and doctors at Swedish Medical Center planned to donate their services. But once doctors began to examine him last summer, they found that not only could they not restore his sight as they initially had hoped, but that Hamoody had severe sleep apnea and badly damaged sinuses from having been shot in the face during the attack — an attack that killed his uncle and critically wounded his mother.

The shooting left him blind, shattered an eye socket and his nose and displaced much of the soft tissue, leaving the boy disfigured. Another uncle drove Hamoody to Iran for surgery, but what was done there only complicated things, local doctors say.

The past year has been full of tests as doctors tried to determine the full extent of Hamoody’s injuries. Eventually, Gruss, an expert in repairing facial gunshot wounds, took over the case, but even he was surprised on Friday at the extent of the damage he found once the surgery began.

Go here for the rest of the story.

March 26, 2007

An Idea for the New York Times’ TimesSelect Service

From the Times’ February report on revenues:

TimesSelect, the fee-based product on that includes The Times’s distinctive columnists and extensive access to its archives, currently has approximately 639,000 subscribers, with about 66% receiving TimesSelect as a benefit of their home-delivery subscriptions and 34% receiving it from online-only subscriptions.

Biz Weak’s Jon Fine at his Fine on Media blog estimates the dollars:

34% of 639,000 = 217,260 paying subscribers.

Assuming all of these people are paying full freight yearly subscriptions–not guaranteed, that–that’s $10.9 million in revenue.

Is it worth $10.9 million to the Times for it to wall off its columnists? You tell me.

I’ll tell you what would be worth it — having about 1.1 million people pay the Times $10 each if they promise to keep the writings of Maureen (“Obambi” Obama) Dowd, Paul (Economic Ignoramus) Krugman, Nick (Mao Wasn’t So Bad) Kristof, and the rest of the rambling runts away from non-subscribers. The Times can keep the change — it needs it.



ALSO: A shameless plug — note that yours truly predicted in November 2005 [fifth bullet at link] that the Times would have a tough time getting over 250,000 paid TimesSelect members.

March 25, 2007

Jeb Bush Denied University of Florida Honorary Degree; He Really Deserves a Statue from Taxpayers and Parents

In discussing this controversy, it’s important for the sake of perspective to remember what Henry Kissinger said:

“University politics are vicious precisely because the stakes are so small.”

While the University of Florida Faculty Senate’s decision to deny former Governor Jeb Bush an honorary degree is, in the big picture, an unimportant kerfuffle, it is nonetheless a cheap and gratuitous insult by a group of malcontented profs who clearly don’t appreciate what an objectively outstanding governor the President’s younger brother was (previous posts on Jeb Bush’s tenure are here, here, and here).

The linked Associated Press story about the honorary degree denial, and others I’ve seen, fail to mention how low Florida university tuitions are compared to much of the rest of the country. A quick look at that unreported part of the story indicates that what Jeb Bush may really deserve is a statue in his honor from Florida’s taxpayers and parents.

Just one example: Biz Weak rated the top undergraduate business schools a few weeks ago (link appears to be free). Here are the rankings of the Ohio and Florida public universities listed, followed by their respective annual tuition bills:

#35 – Miami (Oxford, OH); $9,911
#41 – Ohio State; $9,426
#43 – Florida; $2,968
#62 – Ohio University; $8,845
#77 – Florida State; $3,300
#79 – University of Cincinnati; $9,399
#80 – Florida International; $2,496
#90 – Central Florida; $3,492
#93 – South Florida; $3,340

Listed Ohio school average: $9,395
Listed Florida school average: $3,119
Difference: $6,276

The Ohio school average is over triple the Florida school average.

The Florida schools above take up five of the seven least expensive slots on Business Week’s list.

Florida’s parents and/or students are, on average, paying or borrowing just over $25,000 less than Ohio’s parents and/or students to get in-state students through four years of college. Floridians also live in a state with no income tax and the 12th lowest/39th highest state tax burden in the country. Yet “somehow,” according to the Biz Weak rankings, Florida’s B-Schools are essentially as good as Ohio’s. How does that happen?


(brief pause to allow Ohioans to recover from becoming ill at what they’ve just read)


Floridians contemplating the performance of Jeb Bush during his eight years as the Sunshine State’s chief executive should be asking themselves, “So where’s that bronze smelter?”

And I’m wondering how long it will be until the well-documented exodus of Ohioans to Florida becomes a stampede.

Cross-posted at


UPDATE: Not everyone associated with the University of Florida is snubbing Jeb Bush –

Former Gov. Jeb Bush was snubbed for an honorary degree at the University of Florida – but he can still call himself an honorary alumnus.

The university’s Alumni Association’s Board of Directors passed a resolution Saturday to make Bush an honorary alumnus.

….. (Leonard Spearman, president of the University of Florida Alumni Association) said the association selected Bush because he supported research at the University of Florida, and because of his efforts to provide funding for more faculty and create a statewide scholarship program. He said the association’s selection had nothing to do with the faculty’s vote.

“What we did was in our own rights, not in our reaction to the Senate,” he said.

March 7, 2007

Is a Mortgage Melt-Down Around the Corner?

Filed under: Biz Weak,Business Moves,Economy,Taxes & Government — Tom @ 2:45 pm

If it’s going to come, this is probably about the time:

Housing counselors and bankruptcy attorneys say they are seeing an increase in troubled borrowers who previously had good credit. “We have clients with 720-plus credit scores, and they are in awful products,” says Jennifer Harris, executive director of the Home Loan Counseling Center in Sacramento, Calif. Some of these borrowers took out option ARMs with low introductory rates and are likely to fall behind when their monthly payment resets at a higher level, she says.

Thomas Gorman, a bankruptcy attorney in Alexandria, Va., says he is seeing more financially strapped borrowers who “probably bought more house than they could afford and then took on more credit-card debt” to furnish the house and pay for the move. When the housing market cooled, they were “caught in the middle,” unable to sell their home or refinance and make their debt load more manageable.

Lenders are also tightening their standards. At a meeting with investors last week, IndyMac Bancorp Inc., the nation’s largest Alt-A lender, said it had raised the minimum credit score at which borrowers could finance 100% of a home’s value and took a number of other steps to tighten lending guidelines.

This article from about a month ago ties in to the problems mentioned. Here’s the money paragraph from it:

….. With ARMs, “the tag line you always hear…is you can refinance with no problem,” says A.W. Pickel, a mortgage banker with LeaderOne Financial Corp. in Overland Park, Kan., who is working with Ms. Keyes. “But it is a problem.” The appraisal for Ms. Keyes’s last loan was inflated, he adds.

Let’s see:

  • Dangerous loan products.
  • Government-sponsored enterprises (GSEs) like Freddie Mac and Fannie Mae lowering approval standards from about 2003-2006.
  • Inflated appraisals, possibly widespread.
  • Lenders who have closed deals when they often knew darned well that the borrowers were probably buying trouble.
  • Ignorant, naive, too-trusting borrowers.
  • Bankruptcy “reform” that could be forcing more borrowers into foreclosure before they fully realize what is happening to them.
  • Now, a possible overreaction (perhaps egged on by Congress) in standard-tightening by the GSEs and lenders. Here’s some evidence from USA Today that this is indeed happening on the lender side, while this subscription-only item at March 12′s Biz Weak says that Freddie Mac and others “are finding religion by instituting tougher underwriting rules.”

Well, you can’t say the mortgage-lending industry hasn’t gone all-out in trying to screw the whole economy up. I still don’t think they will, but they certainly deserve a Devil’s “A” for effort.

ADP’s February Employment Numbers: The First Release of a Hopefully Improved Report (Feb Report: +57,000)

Filed under: Biz Weak,Economy,Taxes & Government — Tom @ 9:25 am

After some significant “misses” last year when compared to Uncle Sam’s Bureau of Labor Statistics (BLS) reports that come out two days later each month, ADP has retooled its National Employment Report. If how Biz Weak assesses the upgrade (appears to require paid subscription) is accurate, it could prove more valuable than what BLS releases — but it will take at least a year, and probably two, before we’ll know that:

A Makeover For A Key Jobs Report

An overhauled version of Automatic Data Processing Inc.’s (ADP) National Employment Report is due on Mar. 7. The changes should get monthly results a little closer to the Labor Dept.’s initial monthly payroll figure. But the report’s more valuable contribution may be a better picture of the labor market in real time.

….. The ADP report now looks at nearly 400,000 businesses with payrolls totaling close to 23 million workers. That’s larger than the initial pool used by the Labor Dept. Plus, the data are now being collected weekly, vs. monthly, and a more advanced seasonal adjustment is in place.

The two measures will still diverge from time to time. When that occurs, early evidence shows the ADP numbers come closer to the government’s final annual employment revisions, released in early February, than the initial Labor Dept. jobs data. One reason is that the ADP report includes businesses not in the government’s initial survey. That makes the report “particularly powerful if you are trying to understand what truly happened to employment, as it will eventually be reported by the [government],” says Macroeconomic Advisers Chairman Joel Prakken.

It will take time to convince the financial markets, but if the revised ADP report proves to be a reliable real-time estimate of true labor market conditions, it will end up being quite valuable.

The final revisions referred to in bold are no small matter. The one just completed a month ago (blogged on here) “found” 981,000 previously unreported jobs, about 750,000 of which were added between April 2005 and March 2006, with the rest coming between April and December of 2006. After BLS’s February 2008 revision, there should be some pretty decent evidence as to whether ADP’s methodology really is picking up on job activity every month that BLS is taking a year or two to detect. By February 2009, the jury should be completely in for the period ending December of 2007. I would expect that there will be a lot of ink consumed and bandwidth burned in the meantime attempting to compare BLS and ADP.


UPDATE: ADP’s reported employment increase for February is 57,000. This report, plus the claims to better accuracy described below, build a bit of drama into Friday’s employment report from the government. Plus, there’s an additional nugget ADP will apparently start providing — a large employer/small employer breakdown:

Other new detail in The ADP National Employment Report shows that employment at small and medium size businesses employing less than 500 workers grew 86,000, while employment at larger businesses declined 29,000. Over the last six months, small and medium size businesses accounted for most of the growth in private nonfarm employment.

March 5, 2007

February ISM Non-Manufacturing: 54.3

Filed under: Biz Weak,Economy — Tom @ 11:33 am

That result is vs. an “expected” 57, and is down from an on-fire 59 in January.

Though an expansion is an expansion, the expansion streak is at 47 months, and things are moving in the right direction, the 86% of the economy covered in the report could use a little more acceleration, so to speak. Let’s hope for at least a bit better next month.

There’s reason to believe that renewed acceleration is coming, since a feeling that inventories are too high (“Inventory Sentiment”) appears to be one of the main drivers for the reduction — yet inventory growth stalled at the end of last year, and was the main reason for the big downward revision of 4th Quarter 2006 GDP last week.

I don’t believe there has been much of an inventory bounceback since then, and the 47.0 and 50.5 January and February readings for the “inventory” element of the non-manufacturing index would seem to support that notion. Orders can’t continue to come in at strongly increasing levels (about 55 in both January and February) without inventories having to catch up.


UPDATE: March 12′s Biz Weak, in an article that appears to be free for now, says that “Inventory Swings Are Whipsawing the Economy” — and that the recent reductions in inventories may (emphasis may) be sowing the seeds for a very strong rebound.

March 3, 2007

How to Repeal Sarbanes Oxley

Filed under: Biz Weak,Economy,Taxes & Government — Tom @ 1:02 pm

I’ve got it: Tell Congress that the UN will only get its US dues money if it is forced to comply with SarBox itself — OR, the UN can get its money if SarBox is repealed for everyone else.

(I know. Dream on.)

As offensive as UN corruption stories are, UN malfeasance like this is a relatively small price to pay for unshackling the US’s capital-raising, economy-growing engine.

(Note for the humor-impaired: That is NOT to say that the really major stuff like Oil for Food, or the child-sex “peacekeeper” scandals, or a couple of the other major ones shouldn’t be prosecuted vigorously.)

March 1, 2007

Yeah, But (FL-13 Vote Dispute Over)

Filed under: Biz Weak — Tom @ 6:14 am

It’s nice that the dispute over Florida’s 13th Congressional District has been decided (Wall Street Journal link requires subscription):

Republican Vern Buchanan won his seat by a mere 369 votes over Democratic challenger Christine Jennings, who has nonetheless refused to concede and has sued to demand a new election. Ms. Jennings claims that faulty software was the cause of 18,000 “undervotes,” or incidences where voters cast ballots in other races but not in the Congressional contest, in what is a mainly GOP district on the Florida Gulf Coast south of Tampa.

However, eight computer experts from several universities looked at the iVotronic software and last week concluded unanimously that it “did not cause or contribute to the CD13 undervote.” Ms. Jennings and her allies at People for the American Way aren’t giving up and are demanding to see the source code themselves. Naturally, they’re also claiming that one of the scientists who conducted the audit is known to have voted for President Bush. Some people will believe anything, but Ms. Jennings looks worse with each day she continues to rage against the machines.

That’s fine as far as it goes, but the dispute’s origins and length should be enough to convince any holdouts that e-voting systems must have a paper trail, as Florida now mandates.

February 27, 2007

Markets Tanking; Tomorrow’s 4th Quarter GDP Predicted Lower

Filed under: Biz Weak,Business Moves,Economy,Taxes & Government — Tom @ 3:36 pm

The markets are tanking today for a lot of reasons (Update: Here’s the close: Dow down 415, S&P down 50, and NASDAQ down 97; good thing I didn’t pop the cork on that “NASDAQ 2500″ champagne yesterday. :–>).

One of those reasons is the belief that 4th quarter GDP to be reported tomorrow will come in way below January’s first estimate of 3.5%.

About two weeks ago, Biz Weak (link appears to be free for now) predicted a big downward revision from the original 3.5% reported in late January to reflect inventory clampdowns by businesses — perhaps to as low as 2.0%. That still seems like a stretch from here, especially since the employment numbers reported in January and February included significant upward revisions to 2006′s final months, and since Christmas season retail sales were pretty darn good but not great. One is tempted to ask if all of these new fourth-quarter employees were sitting around producing almost nothing.

But tomorrow will indeed tell the tale.


UPDATE: This and this would seem to indicate that panic isn’t called for.

UPDATE 2: I would also suggest that the stock market news out of China (note: NOT Hong Kong) seems to be reflective of a mini- (and maybe more) Internet/Tech bubble. The hype around Chinese stocks with nothing there shouldn’t be overlooked. The point is that the attempt to build a “China is overvalued, therefore the US is too” seems pretty thin from here.

And I’m not in the mood for speculative market discussion, which is why comments (not pings) are turned off.

So Remind Me, Because I’m Confused….

Filed under: Biz Weak,Business Moves,Economy,Taxes & Government — Tom @ 7:41 am

….. was it the 1980s or 1990s, or is it the current decade, that was/is the Decade of Greed?


(HT e-mailer Larwyn; link appears to be free for now)

February 26, 2007

Great Point: On Wendy’s Closing Its Original Store

Filed under: Biz Weak — Tom @ 6:01 am

Brian at One Oar points out the difference between how Wendy’s is handling sales at its original Columbus store (i.e., despite the emotional bond, they’re closing it) vs. the consistent failure of governments at all levels to weed out what isn’t working.

February 22, 2007

Couldn’t Help But Notice (022207)

According to a subscription-only Biz Weak “Upfront” snippet (8th item at link), suburban Cincinnati’s Butler County Child Support Enforcement Agency is providing three local pizza delivery companies with “Wanted” posters of non-child-support-paying parents for whom criminal warrants have been issued.

This is better coverage than the story was given by the Cincinnati Enquirer two weeks ago at the time of the original announcement. The Enky left out the “criminal warrants” part, which has to be seen as a pretty significant oversight.

From the “It’s Your Fault” Department

SEATTLE – Microsoft Corp. Chief Executive Steve Ballmer said Thursday analysts’ forecasts for revenue from Windows Vista in fiscal 2008 were “overly aggressive.”

Ballmer’s comments come two weeks after the world’s largest software maker released Vista, the upgrade to its ubiquitous Windows operating system, and predicted that consumers will move to Vista faster than past Windows upgrades.


I know better than to offer an opinion on this.


Okay, so the enemy of my enemy is supposed to be my friendBut here is a case where someone pretending to be my friend is cozying up to my enemies. Very sad to say after all these years, but I think that makes him my enemy too.