Morgan Stanley sells off entire NYT stake

posted at 2:40 pm on October 17, 2007 by Bryan
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MS owned a 7.5 percent stake, until today.

Oct. 17 (Bloomberg) — Morgan Stanley, the second-biggest shareholder in New York Times Co., sold its entire stake today, according to a person briefed on the transaction, sending the stock to its lowest in more than 10 years.

The person declined to be identified because Morgan Stanley hasn’t made the sale public yet. Traders with knowledge of the transaction said Merrill Lynch & Co. sold New York Times stock worth $183 million in a block trade.

Hassan Elmasry, managing director of Morgan Stanley Investment Management, has unsuccessfully challenged the Sulzberger family’s control of New York Times Co. through super- voting shares that give them control over the board. Shareholders owning 42 percent of the company, parent of the namesake newspaper and Boston Globe, withheld support from directors at the publisher’s April annual meeting.

“This guy has been speaking for a lot of people who are too discreet to speak up and challenge management,” said Porter Bibb, a managing partner at Mediatech Capital Partners LLC in New York and a former New York Times Co. executive.

New York Times shares slid 48 cents, or 2.5 percent, to $18.43 at 12:44 p.m. in New York Stock Exchange composite trading and fell as low as $18.28, a level not seen since January 1997.

The battle between Morgan Stanley’s managing director and the Sulzbergers has been going on for months now, but this move might be the one that causes the most ripple effects. Other institutional stockholders may follow Morgan Stanley’s lead, the Sulzbergers may even have to consider taking the Times private. The Times’ stock has been on a consistent downward slide for months.

Update: Just to make it clear what I think about this, “Heh.”

Update (AP): It’s practically in the job description for conservative bloggers that every sharp downward turn of the New York Times’s share price must be gleefully flagged and remarked upon, but in all my years of reading celebrations of the Times’s financial woes, I don’t think I’ve ever seen a forecast of what it’s likely to mean for the paper’s coverage. Obviously there’s no way to improve management by getting rid of Sulzberger; if it comes to cutting features and/or personnel, most papers would probably start with the foreign bureaus. That’s the Times’s bread and butter, though, and just look at the crap they’re competing with. They can’t afford to give up that advantage.

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