RE: RE: RE: 2011-09-07b4545: I appreciate you taking the time to put together your opinions/comments. A few comments inline in reply to yours.
ya but,
1. company is trading at less than 1/10 of book value
1.Andfor a good reason because no one really knows the true book value.Their ylo pages book's value fell off a cliff and took the sp with it.
<Mark>The book value, which has existed for 100+ years decided to fall off a cliff all in the span of 6 months? Really now? or was it the stock price that fell off a cliff? A company doesn't just lose 90% of it's value in timeframe like that. The SP right now simply does not reflect reality.
2. their average current debt is at interest rates LOWER than they've ever had
3. they have the capacity, with cash on hand, to pay down ALL non-revolving debt that matures in the next 4 years
2/3. yes, but the debt load is insurmountable
<Mark>The debt is not insurmountable if everything that matures in the next 4 years can be paid off with cash/near terms assets in it's entirety. The low borrowing rates make it much easier to pay off.
4.they recently sold a single division (auto trader) for just about thesame $$ that could be used to purchase all of the company's stock (i.e. asingle division that used to make up only a small fraction of incomejust sold for more than the shorts would have us believe the company isworth). To see just how little "vertical media" (auto trader)contributed, check out the segmented info in financials.
4. sold it for less than they paid for it
<Mark>It was still the correct move to sell it and it was still, according to current share prices, worth more than the ENTIRE company. Something is wrong with that picture. How does a division that barely broke even (lost money in 2010) sell for more than an entire company?
5. growing online revenues (up 30+ percent in the first half this year compared to 2010)
5.subscriptions falling yet revs up = fewer clients paying more $$. Howlong will that last? Costs of printing useless book rising and cost ofpension payouts rising as long time employees retire to nice pensionsthat ylo will be responsible for until they go bankrupt.
<Mark>Nope: Average advertising cost per advertiser was about the same -- not fewer paying more. Advertisers in printed book did decline as expected. However, online subscribers seem like they must have gone up. Yearly earnings per share were about 60% of current share price -- in just one year. This means that with just the 2010 earnings, you could buy a majority stake in the company at current share prices. There is no cash flow issue.
Seems like a pretty decent "gamble" to me relative to a lot of the stuff that's out there. The price is ridiculously cheap.
.
Not as cheap as it will be.
Mark = pumper of a high risk gamble.