Peter Kafka

Recent Posts by Peter Kafka

Gannett’s Good News Comes And Goes, Very Quickly

newspaperlessThis is what passes for good news in the newspaper business these days: Someone bought some shares of one of the industry’s biggest companies.

That revelation is supposedly what goosed shares in Gannett (GCI) 34 percent today. The problem with that theory: The same news–that Ariel Investments LLC had more than doubled its stake in the company, from 4.5 to 12.5 percent–had already caused Gannett shares to jump 39 percent last Thursday when the news was first disclosed.

The more obvious and less savory reason for Gannett’s share swings today, as noted by Editor & Publisher’s Fitz & Jen:  a short squeeze. About 30 percent of the company’s shares are shorted, and now that GCI shares are down in the $5 range–less than a year ago, they traded above $31–you’re likely to see this kind of volatility on any given day.

In any case, the excitement appears to be over: As I type this, GCI shares are back down to the $4 level, just a bit above where they opened this morning.

If you’re looking for actual news about Gannett’s performance, you can tune in on Thursday, when the company releases its quarterly report card. Or you can read this prediction from The Wall Street Journal, which wins the concision award–spoiler alert!–with this headline: “Gannett Earnings Set To Show Depth Of Industry’s Decline.”

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work