Monday, July 21, 2008

The Observer-Dispatch Deathwatch

Google Finance has Gatehouse Media, the O-D's corporate parent, trading at just 95 cents as of 12:20 EDT.

Update: How likely is it that Gatehouse will be forced to liquidate it's assets, including the Utica "Observer-Dispatch, Herkimer "Telegram", Little Falls "Times", and the various local Pennysaver publications? One of the major investors in the company, holding 40% of the available shares, is Fortress Investment Group. According to this story, which has an interactive organization chart that takes forever to load, Fortress has seen it's own shares go into the tank over the last year because of bad investments in the mortgage industry.

These are tough times for Fortress, one of the few publicly traded hedge fund and investment management firms.

Since that earnings announcement, Fortress abandoned its effort to buy Penn National Gaming, the value of its new mortgage-backed securities fund is down 30 percent, and the stock of one its major investments — GateHouse Media — “could be worthless,” according to one analyst. Fortress owns about 40 percent of GateHouse.

The price of Fortress Investment Group’s own stock continues to fall. It closed at just over $10 last week, down from $31 when the company went public in early 2007.

It's possible that their desire for a quick influx of cash could help push the liquidation process along.

Update: The O-D still hasn't reported on the free-fall of Gatehouse Media stock.