The Politico reported on Friday that Washington Post CEO Don Graham told shareholders that this has been “the worst year in the history of the Washington Post newspaper,” and that he was “disappointed in the stock price relative to where it has been in the past.”
On Friday the stock closed at $330 per share, which is down nearly 24% since the end of 2010, representing a loss of nearly $800 million in market cap for the company. This makes it worth just a little more than the struggling Gannett newspaper chain.
Graham stood fast in the face of questions from shareholders about spinning off the unprofitable divisions and he is banking on an eventual economic recovery to return the company to good financial health.
But that may be short-sighted, as former Post Co. cash-cow Kaplan Education saw its profits slide 50% in the last year-over-year period as the company instituted new enrollment and financial aid policies following a government crackdown on for-profit educational companies.
If Graham tries to sell the unprofitable divisions now he may actually receive something of value in return. But if he waits too long he may get a repeat of the Newsweek scenario in which the Post sold the ailing magazine for just $1.