Monday afternoon update: The Dow Jones average lost 800 points at one point today, before closing down 365. Belo was one of the few bright spots. It opened at $4.02, another low, and then rallied to $4.75, a 14 1/2 percent increase. Trading was light (just more than half of normal), which may account for the odd swing up. Or investors saw a chance to buy a stock whose capital assets, like real estate, are worth more than the company's stock market cap.
A.H. Belo, the parent of Dallas’ Only Daily Newspaper, saw its stock fall to $4.15 on Friday, easily dropping through the previous 52-week low. It’s probably headed lower today, given the meltdown in the Asian and European markets this morning.
What’s interesting is that the stock had rallied since the middle of last month, getting as high as $7 a share. And then the bottom fell out, falling 41 percent in three weeks. The rally makes a little sense –- Belo announced layoffs and cutbacks this summer that included closing The News’ bureau in San Antonio, and that always makes Wall Street happy. Plus, it cut its dividend in half at the end of last month, which also pleased the stock analysts.
But the slide? Who knows? It’s probably a combination of the general stock market malaise, Wall Street’s displeasure with newspaper stocks, and some unique Belo problems. The company doesn’t announce monthly results, like other major chains, and the stock tends to be sold off because it doesn’t.
The end result of the slide? Belo’s market capitalization is less than $90 million, which means it’s ripe for a takeover –- if anyone can raise the money in these historically tight credit markets and if they can find away around the company’s two-class stock system, which makes takeovers more difficult.
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