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Harbinger cuts New York Times stake again

Date: Friday, December 4, 2009
Author: Robert MacMillan, Reuters

- Hedge fund Harbinger Capital partners has cut its stake in The New York Times Co (NYT.N) yet again, about two years after spending half a billion dollars to become one of its largest shareholders.

* Harbinger cuts New York Times stake to 12.79 pct

* Harbinger stake cut is third since September

* Hedge fund still "believes" in New York Times

* New York Times shares close up 3 cents at $8.55 (Adds Harbinger statement)

Harbinger reported a 12.79 percent stake in the Times Co's publicly traded shares in a securities filing on Thursday. On Nov. 19, the company reported that it owned 14.64 percent of the Times' shares.

Both numbers are down from a 16.38 percent stake it reported in September and the approximately 20 percent of the newspaper publisher that it bought in late 2007 and early 2008 for about $500 million.

Some media reports in recent weeks speculated that the hedge fund and Harbinger's chief investment officer, Philip Falcone, had grown tired of their investment and would prefer to cut and run with a loss after a year of financial crisis and recession.

Harbinger's statement disputed that notion.

"Harbinger Capital Partners continues to believe in the company, and we are modifying our position as part of our ongoing portfolio management," a spokesman for the fund said.

Harbinger had paid in the neighborhood of $20 a share for the Times stock that it bought. It has taken a big loss on its investment since 2008.

The Times and other newspaper publishers have reported big revenue declines because of falling advertising sales, both because of the recession and waning reader interest in paying for news in printed newspapers.

Based on Thursday's closing stock price of $8.55, Harbinger's stake is worth a little more than $157 million.

Harbinger and investor partner Scott Galloway had used their growing holdings in the Times' publicly traded shares to mount a proxy battle against the Times.

That amounted to a battle against Chairman Arthur Sulzberger Jr. and his family, which has run the Times since 1896 and controls it through a special class of shares.

Galloway had argued that the company and the Sulzbergers had become complacent about changes at the company and in the news and advertising business.

New York Times shares rose 3 cents to close at $8.55 on the New York Stock Exchange on Thursday.