How One of America's Most Iconic Media Companies Became a $3.51 Stock

In early 2009, shares of The New York Times Company (NYSE: NYT) dropped below $4.

Yes - $4.

This was a company that had once been among the most respected and influential media empires in the world. And now? Trading like a micro-cap stock.

The cause: a perfect storm of collapsing print ad revenue, mounting debt, declining circulation, and the worst financial crisis since the Great Depression.

At its lowest point, NYT shares traded at $3.51 in March 2009. That's a 90% decline from its peak of around $50 in 2002. The company's market capitalization had shrunk from over $6 billion to under $500 million.

The balance sheet was a mess. By the end of 2008, total debt stood at $1.1 billion. Cash on hand? Just $46 million.

In Q4 2008 alone, advertising revenue fell by 20.9%. Print ad revenue dropped 24%, and digital wasn't nearly developed enough to fill the gap. Full-year revenue came in at $2.9 billion - down from $3.2 billion the year before.

The Times was also burning through cash. Free cash flow went negative. The dividend - once sacred - was slashed from 23 cents per quarter to just 6 cents in February 2009. Eventually, it was eliminated entirely.

With a $250 million revolving credit line set to expire and few options available, The New York Times Company turned to Carlos Slim.

In January 2009, the Mexican billionaire injected $250 million into the company through structured notes paying 14% annual interest. He also received warrants for 15.9 million shares at $6.36 - a deal heavily criticized at the time as a distress play.

But the reality? Slim's bet worked. He eventually became the company's largest shareholder and pocketed hundreds of millions as NYT stock rebounded.

Still, the comeback was anything but swift.

The NYSE requires listed stocks to maintain an average closing price of at least $1 over 30 trading days. While NYT didn't dip below that line, it danced uncomfortably close. With investor confidence tanking and analysts issuing downgrades, delisting didn't feel far-fetched.

The company also had to watch its market cap. Below $50 million? That's NYSE delisting territory too. While NYT never breached that mark, it briefly flirted with levels under $400 million - a shocking fall for a global media brand.

The long road back began with painful cost cuts, digital investment, and a full embrace of paid subscriptions. The 2011 rollout of the digital paywall changed everything.

By 2016, digital-only subscriptions had reached 1.6 million. By 2020, that number had grown to 5.7 million.

Revenue in 2022 hit $2.3 billion, with over 67% coming from digital sources. The company now boasts over 10 million total subscribers.

NYT shares? They topped $60 in 2021, giving the company a market cap north of $10 billion.

But back in 2009? None of that was guaranteed. It was a near-death experience - one that legacy media companies are still learning from.

Filed under: General Knowledge