Why The New York Times Soared Nearly 11% Today
Shares of The New York Times (NYSE: NYT) closed 10.6% higher on Thursday, according to data from S&P Global Market Intelligence, down slightly from an intraday gain of 11.8%. The move is in response to a newly disclosed activist investor's stake in the company.
It was a much-needed bullish jolt for the struggling stock, which is still down 37% since November's high despite a recent wave of bullishness. Activist investor ValueAct Capital Management disclosed in a regulatory filing submitted Thursday that it's holding 11,014,741 shares of the stock, or a 6.7% stake in the newspaper company.
ValueAct explains in a letter obtained by Bloomberg that The New York Times' current stock price doesn't fully and fairly reflect its true potential. As is usually the case with activist investors, though, ValueAct has a plan to unlock that value. Bloomberg reports the letter reads "...most current readers and subscribers are interested in the bundle and would pay a large premium for it but are not aware the offering even exists." The letter goes on to say, "This is an opportunity we believe management needs to drive with urgency, as it is the biggest lever to accelerate growth, deepen NYT's competitive moat, and ensure the long-term strength and stability of the platform."
Source Fool.com
