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Harbinger Capital Partners sold 300,770 shares of Media General, the parent company of the Richmond Times-Dispatch over the last two weeks. It announced the aggregate sales in a filing with the Securities and Exchange Commission yesterday.
Harbinger reduced its stake in Media General to about 3.7 million Class A shares, or about 16.7 percent of outstanding stock. Harbinger had held an 18.2 percent stake as of March, when Media General filed its proxy statement.
The New York-based hedge fund sold the stock at prices of $6.50 per share on Nov. 10 to $4.22 per share Monday, for a total value of about $1.5 million, according to regulatory filings.
Media General's policy is not to comment on investor activity, company spokesman Ray Kozakewicz said.
Media General shares closed yesterday at $2.23, down 73 cents, or 24.7 percent. Shares fell as low as $1.36 yesterday.
Also yesterday, Media General reported that its October revenue was down 5.8 percent to $85.9 million compared with $91.2 million the same month of 2007, as advertising weakness in its publishing division offset revenue growth in its broadcast and interactive media divisions.
Other media companies also have reported advertising declines. McClatchy Co., the nation's third-largest newspaper publisher, reported Wednesday that its revenue was down 17.8 percent in October.
The decline in Media General's stock also reflects the overall stock-market slide and investors' worries about consumer confidence and spending, which affects businesses including media companies, said Steve Marascia, an analyst at Anderson & Strudwick in Richmond who follows Media General.
"In this kind of market, investors are selling and asking questions later," he said.
Media General owns 19 network-affiliated television stations, 24 daily newspapers, and about 275 weekly newspapers and other publications, mostly in the Southeast. It also owns Web sites affiliated with its newspapers and television stations and other online enterprises.
In April, Media General's Class A stockholders elected three directors to the company's board who were nominated by Harbinger. The company's board voted in June to expand from nine to 11 members and to re-appoint two directors who did not win re-election in the April shareholders vote.
Harbinger also holds about a 19.9 percent stake in The New York Times Co. and won two seats on that company's board of directors in March. The hedge fund has pressured The New York Times Co. and Media General to make changes to their business models.
Harbinger disclosed this week that it had closed on equity swaps for about 1 million "notional" shares in The New York Times Co. Notional shares are not real shares but rather indicate the face value used to calculate the swap payment.
As part of the swap transaction, Harbinger and Monecor Ltd. set an initial reference price, with Monecor agreeing to pay Harbinger the difference between the reference price and the market price if the stock climbed, and Harbinger paying the difference if the price dropped.
From January to September, Harbinger conducted 30 swaps on about 4.4 million New York Times shares at prices of $12.76 to $15.96, according to an SEC filing. The sharp decline in the company's stock price during the past several months means that Harbinger had to pay Monecor the difference between the reference price and current stock price.
The Associated Press contributed to this report.
To see more of the Richmond Times-Dispatch, or to subscribe to the newspaper, go to http://www.timesdispatch.com. Copyright (c) 2008, Richmond Times-Dispatch, Va. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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