By CCT STAFF
In the aftermath of McClatchy filing for bankruptcy and amid an early hurdle in the case, the newspaper publisher’s stock tanked to less than 10 cents a share late last week.
McClatchy stock began trading Tuesday at 8 cents a share and closed the day at 14 cents.
Five years ago, McClatchy stock was listed at about $25. Fifteen years ago, the company’s stock price was more than $700.
Last September, the New York Stock Exchange placed the company on notice that if it did not reverse its declining stock price, it would be delisted.
On Thursday, McClatchy, the parent company of the San Luis Obispo Tribune, announced it filed for Chapter 11 bankruptcy, a move due in large part to the company’s overburdened pension system.
At the time of the announcement, McClatchy stock was trading at about 75 cents a share. But by Friday, the share price had fallen to 9 cents.
The same day, a federal pension agency sought in court to delay mediation in the bankruptcy case. A McClatchy report stated a nearly complete deal between the company and its creditors could be in jeopardy if the bankruptcy proceedings last more than 60 days.
On Tuesday, though, a bankruptcy judge ruled McClatchy can enter mediation with its creditors on March 4, raising hopes the newspaper publisher will emerge from bankruptcy within two months.
If the bankruptcy proceedings go as planned, the company will undergo an ownership change that will end McClatchy family control of the publisher, which has existed since its founding in 1857. The hedge fund Chatham Asset Management could then possibly obtain a controlling stake in the company.