Thursday, November 03, 2005
Regarding Knight-Ridder "This is a falling knife"
Editor & Publisher reports that Knight-Ridder issued its first statement about the quickly progressing events of the past week. That statement, read by Knight-Ridder's Polk Laffoon IV, was all of two sentences.
Jake Newman, analyst at CreditSights in New York, maintained his "underweight" recommendation on Knight Ridder, adding it is impossible to predict how much debt a buyer might add to the company's balance sheet.
"This a falling knife," Newman said, which means it is difficult if not impossible to know when to jump in and go long this credit.
In the bond market an "underweight" recommendation is roughly comparable to "sell" in other markets
... he [Laffoon] said that the "board takes its fiduciary duties seriously and will respond in due course."
He did not confirm reports that the company had retained an investment bank to explore strategic options.