December 4, 2008

Maybe the answer is to buy the whole company

I wonder if perhaps we're thinking entirely wrong about this whole save the Press effort.
After all, the entire JRC company is worth, at the moment, just $236,000. Maybe the way to save the newspapers we care about is to buy the whole company and then spin off the Connecticut properties in some way that they would not carry the hundreds of millions in corporate debt with them.
I know other enterprises have done that sort of thing in the past. Of course, they are much more clever about corporate finance than I am, or, apparently, than the folks who formerly ran the JRC.
That would free not just the Press, the Herald and the 11 weeklies facing a Jan. 12 closure deadline. It would also ensure that the company's other Connecticut papers, including the New Haven Register, would have a viable shot at survival.
Is there anyone out there who understands this stuff? Am I nuts?
*******
Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

13 comments:

Anonymous said...

You are nuts. It is an interesting idea, though.

Anonymous said...

How can a company worth $236,000 own a building on Main Street that must be worth at least $1 million? Am I missing something?

Anonymous said...

Save the Press! Save the Press! Save the Press!

Anonymous said...

Steve, you are crazy... like a fox.

Bob Boudreau said...

Anonymous said...
How can a company worth $236,000 own a building on Main Street that must be worth at least $1 million? Am I missing something?

December 4, 2008 6:12 PM


This might help explain....via Wikipedia...
Market capitalization
is a measurement of corporate or economic size equal to the share price times the number of shares outstanding of a public company. As owning stock represents owning the company, including all its assets, capitalization could represent the public opinion of a company's net worth and is a determining factor in stock valuation


Part of the problem is that the debt the Corporation holds far out weighs the value of its assets. In other words at this time, the Corporation has a negative net worth.

Hence if the Corporation goes belly up, then all assets (including the Main St. Property) would be liquidated to pay the creditors.

Poboy said...

"How can a company worth $236,000 own a building on Main Street that must be worth at least $1 million? Am I missing something?"

That number reflects the value of the stock, which is less than a penny a share. JRC has more debt than equity just like people that are upside down on their mortgage.

Anonymous said...

The cost would not be $236,000. It would be $236,000 plus debt. So the real price would be about $700 million. Have that much money kicking around?

That's why what overall is still a profitable company has a stock price of 1 cent.

Poboy said...

"That's why what overall is still a profitable company has a stock price of 1 cent."

There is no net profit, never really has been. The company has always generated income but servicing the debt has eaten any net profit almost every year the company was in business. Terrible business model, incompetent managenent.

AnonymousWestconnStudent said...

The other issue with buying the controlling shares in the company is the effect it would have on the people who work for them.

Capital management groups have been know to get involved in ventures like this. What they'll do is purchase the company. Sell off or lay off as much cost as possible and then sell the hollowed out carcus to another company to hold onto. Good for balance sheets, not so good for the people who have put years into the company.

Anonymous said...

Steve,
Just out of curiosity how much of the Bristol building is actually used? I fi recall they stopped printing the press locally some time ago or am I mistaken? Would it make more sense to move to a smaller building? Just wondering?
Mike

Justin Kloczko said...

So in your opinion, how much would it cost to buy just either the Bristol Press or NB Herald?

Steve Collins said...

I'm reasonably sure each paper would sell for less than $1 million, perhaps much less. But anyone who wants to know can contact the broker in New Mexico and ask.

Justin Kloczko said...

Anyone have this person's contact info?