Dear Mr. Berko: I used to own New York Times stock back in the early 1980s when it traded in the $80 price range. I bought 500 shares last year at $12 because I felt the stock was cheap and its business could recover and because I heard that it might be bought out at $28. Now I hear that there may be a buyer from Japan or Australia. Should I continue to hold the stock, or are those rumors dead? Also advise me on Yandex, which you recommended in March at $30. I bought 200 shares then. The stock went down to $21, and I nearly choked.
— J.W., Kankakee, Ill.
Dear J.W.: There has been a persistent rumor that The New York Times Co. (NYT-$14.68) is for sale. Well, Executive Editor Jill Abramson was just canned, so it could happen. A few years ago, I’d not have believed an American icon such as The Wall Street Journal would change ownership. But “Rupe” Murdoch, an Aussie magnate with cavernous pockets, bought the Journal in 2007 for $5 billion, and it has not been the same since.
Meanwhile, the rumor of an NYT buyer making rounds is ascribed to Chen Guangbiao, a Chinese billionaire, the American equivalent of our orange-headed, corpulent Donald Trump. Chen is an over-fat egomaniac who sometimes wears trademark lime green suits and counts his mistresses the way insomniacs count their sheep. This bloviating tycoon, whose business card would have been a huge hit on “Laugh-In,” has no more idea of how to run a newspaper (especially The New York Times) than would a dung beetle have to play a harpsichord. Even though NYT’s revenues last quarter were up 2.6 percent (net income was down 8.5 percent), CEO Mark Thompson and Publisher Arthur Sulzberger sold over 50,000 shares each in April at $16 plus change. NYT is facing a muddy road ahead and has lost some ace reporters. The shares have doubled their price in the past year. But despite that and the rumor that it will be acquired, I believe the stock will be a lackluster performer and offers little appreciation potential.
As far as Yandex (YNDX-$30) goes, the last time my timing was so bad was in late August 1987. I invested $13,800 from a maturing certificate of deposit and purchased three stocks, which I had painstakingly researched, for my individual retirement account. I was so darned certain of my choices that I grinned for a week like a Cheshire cat. A month later, the market imploded (it was Black September) like a descending fireball, and my IRA plunged 43 percent in just six hours.