The New York Times (NYSE: NYT) is one of the most revered newspapers in existence. Covering everything from pop culture to global politics, millions of Americans read the Times everyday in order to keep up with current events. Despite thousands of competitors coming out, the Times seems to be a Stalwart in the journalism industry.
One thing that may hurt the New York Times Company, however, is that its email list may have been hacked. Security breaches are never a positive thing, although the Times' latest attack seems to be fairly benign. This morning, many users received spam emails stating that their subscriptions have been cancelled, even though they were just fine. The email told users to call a toll-free number, which ultimately led to silence. In what may be a data mining attack, New York Times' customers have to consider the implications.
If hackers have been able to mine their email addresses and phone numbers, is there a chance of more sensitive information being compromised? No one can tell at this point, but there will always be paranoid customers. It is likely that this event will spur a few cancellations, and if more unsolicited emails or calls are made, the momentum will likely continue.
The tough times don't stop there for the Times. Recently, the New York Times Company sold its Regional Media Group to Halifax Media Holdings. While it has not been officially revealed, many employees are scared about layoffs. Benzinga reached out to the New York Times Company, but it was unable to comment on the job situation.
The New York Times never explicitly stated why it was selling that division, either. While generic comments were made, the Times may have sold the division because it was unprofitable, because it desired additional liquidity, or because it wanted to pursue other unique opportunities.
Investors and customers alike have been fairly loyal to the New York Times. While printed publications have essentially been phased out, the company has been able to ada! pt and m aintain its stature as competitors have been emerging daily. At this point, given possible operational weakness and security problems, investors may want to consider distancing themselves from the company, or even making a profit from its problems. Only time will tell, but the Times may become a thing of yesterday, succumbing to negative consumer sentiment.
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Bullish View:
Traders who believe that the New York Times will recover in the future might want to consider the following trades:
- Long the Times by purchasing shares or call options. If you go with the options strategy, you could purchase a straddle just to reduce risk associated with the bet.
- Long the S&P Retail SPDR, which will most likely rally if hurt companies like the Times strengthen over time.
- Long companies with operational advantages such as Ganett! Co (NYS E: GCI), which may also benefit if the rest of the sector outperforms.
Traders who believe that the Times will continue to decline may consider the following positions:
- Short equity markets via ETFs or futures as major earnings releases approach. Major companies like the New York Times are capable of moving overall markets downward.
- Short the Retail SPDR over the long-term. You could also short specific companies and long the Retail SPDR as a hedge.
- Long a competitor like News Corp (NASDAQ: NWSA), which may prevail regardless of Sears' decline.
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