The parent of Dallas’ Only Daily Newspaper closed at $5.32 on Monday, hitting yet another all-time low. That’s at least the third in the past week.
A.H. Belo, for all its other faults, doesn’t have any debt, and its management has traditionally been respected for its business acumen. Even though most newspapers are being flushed down the investor toilet, Belo doesn’t seem to have done anything to deserve this particular shellacking. Its market cap is just $109 million, which is so low as to be silly. The News’ downtown headquarters is appraised for $43 million, and may be worth much more given the way things work around here. Throw in the other three papers it owns, and the real estate alone is probably worth more than the market cap.
So I called the world’s leading expert on all things newspaper, John Morton of Morton Research, who has been analyzing the newspaper business since Jimmy Carter was president.
Morton had two theories: First, that Wall Street is punishing Belo for not announcing its monthly revenue figures, which most of the other major chains do. In May, for example, most newspapers saw a 15-16 percent revenue decline. Belo only announces quarterly results, which it will do in a couple of weeks. Morton says Wall Street isn’t taking chances. "Belo’s numbers might be better, they might be the same or they might be worse, but who knows?" he says. Better to bid the stock down now then be surprised when the company releases its second quarter numbers.
And the second theory? That the heirs to the Dealey family, led by CEO Bob Decherd, will take Belo private when the stock gets cheap enough. Which will be any day at this rate.
