Value of Fairfax Media hits two decade low
Shares in Fairfax Media have hit their lowest point since the company was listed on the ASX 19 years ago.
They dipped briefly to 85c this morning. The company’s previous low was in March 2009 at the height of the GFC. Since the start of the year, Fairfax Media’s value has dropped by more than 40%. Today’s fall was part of a wider slide on the ASX.
2011 year-to-date Fairfax Media share graph: Google Finance
At their highest, Fairfax shares were priced at $6 in 2000.
Easy to understand why – Retail and real estate are Fairfax Media’s big spenders and both are hurting bad.
Plus the company is a text book case of how not to manage the transition from print to online. Watch out for ABC newspaper circulation data on August 12. Apparently it’s another set of horror figures.
Nice work Mr Hywood-Corbett. The excuses will be hilarious.
Memo to Fairfax staff: Step 1. at this level, seriously consider an option for a management buy-out and sack the board; Step 2. exploit agent and dealer discontent within Carsales and REA markets and re-build market share ASAP; Step 3. sell NZ division and reinvest cash into AU acquisitions; Step 4. phase out the left-leaning editorial attitude of the AFR and make it more commercially savvy and in touch with he majority opinion of the business community. Think WSJ and its right of centre, pro-business positioning. For such a unique product, this paper’s readership decline over the last decade is nothing short of a disgrace.
Back in 2008, I was faced with two problems, one was I used to work for Fairfax and the other was, I had to under go major surgery. Just before the anaesthetist started to prepare me for surgery, the anaesthetist asked me where I worked. I told him Fairfax, and then the tirade started. Boy, did that anaesthetist vent his spleen against Fairfax.
This. of course, made me lying there awaiting surgery very comfortable and wondering about life and whether my will is up to date.
Thats what you get for putting a bunch of farmers in charge then replacing with dot.com wannabies. Such a shame but great brands need great stewardship and that has been sorely missing for a while now.
At the time Rural Press merged with Fairfax in April 2007, the value of the combined entity was around $9 billion. It’s currently trading with a market capitalisation of $2.1 billion. This is value destruction on a grand scale.
As a loyal reader of The Age, I hope they find a way to turn it around…
This price is an idiotic indicator of the company’s value. That said, equity markets are f*#ked and are literally the last resort for company financing at the moment. Combine that with the flux dominating the media industry, and there must be a tremendous incentive to privatise this company, shut the gates, and rebuild behind closed doors.
Fast forward three years, and behold Jack Matthews in top hat, wild hair and purple overcoat opening those gates and welcoming the world to a new Fairfax, complete with chocolate river and its version of Wonkavision.
I just love the Fairfax Haters! Not……
Debt has been the largest issue and one would be asking who decided that was a great idea? Oh yes the board. It will be interesting to see if they can sell Fairfax Radio
but I would suggest they have no choice. The other recent suggestions to float 50% of the NZ on-line assets also has to happen sooner rather than later but the challenge is doing that in a very tough financial market. I think they should have done that 6 months ago.
The one great thing the company does have is brilliant people in the business and the New strategies are the right approach. Questioin is do they have enough visionaries on the board. It is tough for a relatively New board to fix fundmental problems quickly
What ever happens the market will be tough for many businesses and Fairfax is but only one of many in the same boat. The board has to get rid of its debt quickly so it’s Digital strategy can succeed.
They’re not being shorted again are they? FXJ is renowned for being shorted by dodgy finance types.
Hywood reached his apogee in December. Since then ….. nothing but press releases. The Fin continues to be a joke on paper (yeah, investors really want a green-left spin on market news) and a nonexistent presence online. Brett Clegg doesn’t even start until September. Same with Garry Linnell, who is the finest journo I have ever seen on a newsroom floor.
Meantime, same editors are still in place (or have been promoted!!!!) and the papers keep filling their pages with stories written by bicycle riding journos for other bicycle riding journos, not the public.
Full disclosure: I worked at Fairfax years ago and was proud to do so. Politically I am centre left, so the Age should be my daily read. I won’t buy it these days, and I haven’t bought it since a Catherine Deveny column that ridiculed Southland shoppers for being uncool Southland shoppers. Well that is me — and why should give a buck and a half to a paper that thinks I’m only there to laugh at. Arrogant sons of bitches can’t hear everyone else laughing at them.
I know Deveny was fired, but the mindset that gave her pride of place for so long still rules. A bunch of smug incompetents staff the Age. A bigger bunch of dills runs the company.
If they don’t get a wriggle on, Gina Reinhardt will control what’s left of a once-great company. Given her existing holding, $400 million at today’s prices would put her in charge.
And that’s frightening.
the problems all started with Fred Hilmer and his refusal to buy Seek when he had the chance
Media has and is continuing to fragment. Many established publishers are challenged by so many new competitors.
So many old school publishing staff (now senior managers) have no idea how to succeed in this new digital age. Or rather do not appear to know. (How many heads of these old skool big publishing houses have computer science backgrounds?)
Believe it or not the game hasn’t changed at all! Just continue doing, what you did, when you were great:
– Produce amazing content and engage with your target audience better than anyone else and you will be fine.
Sadly, SMH online is nothing but a tabloid and the old audience is leaving in droves.
Sadly too, auto play ad’s continue to p1ss people off, yet the unethical new skool (or is it the old?) continue to allow videos to start without the user wanting them too.
I am going to stop there, however the list continues…
Success online = pick one thing and do it well. Tim, in my opinion, has done this with Mumbrella, for example.
There are so many talented journalists out there who could totally save Fairfax and their previously prestigious offerings. Perhaps, if the staff at Fairfax with the ears to the ground are given a voice and some empowerment, then Fairfax might well become great again?
Looks like a Google Panda Graph…
Off topic, but on the “Panda” slant; that ‘About’ site is still getting returned loads. I hate it, it doesn’t help me, why does Google keep returning it?
Richard Dirth et al: check your facts. The money being made today is largely in the niche and rural businesses plus TradeMe. That includes the AFR and what some smarties above seem to think is the leaden influence of Rural Press. Wrong and wrong (and by the way the AFR reach into business decision makers is higher than both FT and WSJ at home). Melburnians know perfectly well that the rot started with soft management of the The Age and more recently this looks to have been the case at SMH. (edited for legal reasons) . Then you have that Sydney-centric board of dunderheads and egomaniacs. Mr Melbourne was chair only long enough to load them up with debt for his dud radio business and some gold plated property. It’s a shame. But Fairfax is sunk and the board is bailng water (in). And for those smarties: ask yourself: which assets would sell?
The quality of the Fairfax papers has gone south at a rapid rate. Its not worth subscribing to anymore. They have shifted to the left as well, to suit political purposes, so balance is missing.