Learn From Carl Icahn: Avoid Newspaper Stocks Until They Start Making Money

August 4, 2008

Carl Icahn’s recent tussle with Yahoo ended with him taking some board seats, and remarking that “historians will marvel at why the press won’t write more about the egregious abuses and mismanagement of corporate boards in America.” The irony here is that the same newspapers who aren’t writing enough about bad management at other companies, are writing nearly nothing about their own poorly run companies, since newspaper stocks have tanked more than any other industry in the last year.

There has been a lot of discussion about the next paper company to crash, now that the 400 newspaper Journal Register is selling for $0.015 (that’s one point five cents!). Based on our interaction with them, we think it could be Gatehouse, since their top Internet guy, Howard Owens, apparently spends his work time updating his personal blog about his view on life, rather than answering inquiries from vendors. Our first contact with Howard was in late April when Gatehouse was selling for about $5.50. Now, three months later, the stock is at $0.44 (forty four cents). Here’s our message to Gatehouse: we want your business, but give Howard the pink slip before your stockholders lose their retirement savings.


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