GCI

Gannett ($GCI) CEO Purchases $107K in Shares Following Disappointing Earnings, Signaling Confidence Amid 50% Stock Plunge

05/07/2025 13:09

As shares of media company $GCI (Gannett) have plummeted in recent months, CEO Michael Reed has made a significant insider purchase immediately following the company's earnings announcement. According to Form 4 filings with the Securities and Exchange Commission, Reed purchased 27,000 shares at $3.25 per share on May 5, followed by an additional 6,000 shares at $3.20 per share on May 6. The total purchase amounted to approximately $106,950. These transactions were executed pursuant to a pre-planned Rule 10b5-1 trading plan. The timing of these purchases is particularly noteworthy. Gannett reported its first quarter 2025 earnings on May 1, posting a loss of 5 cents per share. While this represented an improvement from the 60-cent loss in the same period last year, the company remains unprofitable. Revenue decreased by 10.1% to $571.57 million, falling short of analyst expectations of $593.10 million. Gannett's stock price had reached as high as $5.81 in late October 2024 but began a steep decline following disappointing third-quarter results in November. The stock particularly suffered in late February through early March 2025, plunging more than 25% to around the $3 mark. Currently, shares trade approximately 50% below their 52-week high. Reed's purchases may signal management's confidence in the company's future despite the stock decline and challenging financial results. This marks the first significant insider buy from the executive team since Director Laurence Tarica purchased 50,000 shares at $4.50 per share in September 2024. Gannett, America's largest newspaper publisher, operates USA Today and more than 200 daily newspapers and digital news platforms nationwide. However, the company has struggled with declining advertising revenue and subscriber attrition as the traditional newspaper industry transitions to digital media. Industry uncertainty has increased with the Trump administration's reduction of diversity, equity, and inclusion (DEI) initiatives and growing legal pressure on media companies. In September 2024, Gannett announced plans to reduce its debt, expecting to cut total debt by $53 million by year-end through asset sales. In its Q1 2025 earnings release, the company highlighted the growing contribution of digital subscription revenue to overall earnings, though declines in print advertising and circulation continue. Michael Reed has served as CEO of the combined entity since the 2019 merger between Gannett and New Media Investment Group. He has focused on digital transformation, cost reduction, and strengthening core assets. This share purchase appears to demonstrate his confidence in his long-term vision. From a financial perspective, Gannett maintains a P/E ratio of 8.51, below industry averages, and a healthy ROE of 26.68%. However, the low profit margin of 2.09% and continuing revenue declines remain concerns. Analysts maintain an average "buy" rating on Gannett, with a median target price of $4.80, suggesting approximately 52% upside from current trading levels. However, some analysts advise caution given the structural changes in the media industry and economic uncertainties. Investors should carefully monitor whether Reed's purchases represent a temporary vote of confidence or signal an impending positive turning point for the company. The upcoming second-quarter earnings report and progress on debt reduction initiatives will be key factors to watch.

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