Morgan Stanley’s One-Two Combo Against New York Times Management

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Morgan Stanley’s stock analysts downgraded the stock of the New York Times to the equivalent of a “sell” rating yesterday, the New York Post reports this morning.

Publishing analyst Lisa Monaco cut her rating on the stock from "hold" to "underweight" - the equivalent of "sell" - saying that the Times' revenue is deteriorating and that, contrary to some investor expectations, a sale of part or all of the company is "implausible."
The negative report came only a day after a Morgan Stanley investment fund based in London stepped up a campaign to push the Times to take away either the chairman or publisher posts from scion Arthur "Pinch" Sulzberger, Jr. and the two-tiered stock structure that keeps the family in control of the company.

Although the New York Post is treating this a blow to Pinch (see graphic on left), ironically the downgrade might indicate good news for the chairman/publisher. If the changes demanded by Morgan Stanley’s investment fund were realistically in the pipeline, Morgan Stanely analysts probably wouldn’t have downgraded the stock. The downgrade is a vote of no-confidence in Pinch but its also a sign that he’s probably pretty safe in both his jobs at the Times. That meter is never going to reach KO.
Times Scared [New York Post]

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