The share price of Fairfax Media – the publisher of the nation’s left-wing newspapers The Age and Sydney Morning Herald – has collapsed.
Its market capitalisation is $2 billion and falling, its lowest point in many years.
Desperate not to be acquired and carved up by private equity predators, it decided to “get big” and in so doing Fairfax borrowed billions to fund acquisitions that are now performing poorly.
Its revenue – in classifieds – is drying up. Its model – serving up lifestyle left-liberal pap politics to an inner-urban elite – seems as 70s as News Limited Peter Rolfe’s charity inspired Mo-vember moustache.
Investors are panicked that the market will be flooded with shares currently held by John B Fairfax, who borrowed hundreds of millions of dollars and could be forced to sell by his financiers if the share price goes lower than $1.20.
At time of publication it was around $1.31 with an intra-day low of $1.26.
John B Fairfax borrowed $170 million to help finance his overall position of 211 million shares. He has other debts too, according to broker informants of VEXNEWS.
His entire net worth is at risk due to him betting on the fortunes of a notoriously mismanaged company.
Any more bad news and he is – financially speaking – dead.
The company has mismanaged its communications about how badly things are going to get. They waited until its AGM to reveal a 15 per cent crash in earnings.
Those who’ve lost 60% of their investment in six months are cutting their losses. If John B Fairfax does too – or is forced to – then the company will be barely capable of surviving.
Ad sales are very cyclical and always have been. As we enter a tough and bruising downturn, only the strong will survive. With Fairfax Media as the sick old man of the world’s media companies, it seems almost certain the company won’t endure in their current form.
The time has come for a patriotic consortium of traditional lefty targets in the form of Labor Right faction members, property developers, miners, pokies barons, casino owners, forest industry operators and other freedom fighters to run their ruler over The Age. The lefty reign of terror is near its end.
Onwards to victory.