Activist Investor ValueAct takes part in the New York Times
ValueAct, an activist investor that has taken stakes in major companies including Microsoft, Reuters and 21st Century Fox, said on Thursday it had bought nearly 7 percent of The New York Times Company’s common stock and would push for changes in some of the publisher’s operations. operations.
The purchase of the stock, disclosed in a filing with the Securities and Exchange Commission on Thursday, makes ValueAct one of the largest shareholders of The Times, along with Vanguard and BlackRock Fund Advisors. The Times is controlled by the Ochs-Sulzberger family, which limits the influence outside investors have on the company.
Shares of The Times, which are down about 27 percent so far this year, jumped more than 10 percent on news of ValueAct’s investment, which was first reported by Bloomberg.
In a letter to its investors on Thursday, ValueAct said it had conducted research that showed many consumers were unaware that The Times sells a bundled subscription to its products, which include news, games, a cooking app and sports publication The Athletic. ValueAct said that created a potential growth opportunity.
“This is an opportunity we believe management needs to pursue urgently, as it is the largest lever to accelerate growth, deepen NYT’s competitive moat and ensure the long-term strength and stability of the platform,” ValueAct said in the letter, according to a person with knowledge of the content.
The Times has 9.17 million paid subscribers. It has a goal of registering 15 million by the end of 2027.
The Times Company has a two-class share structure. The shares used to elect the majority of the company’s board, called Class B, are controlled by a trust for the Ochs-Sulzberger family, which owns 95 percent of those shares. The family has controlled the business since Adolph Ochs bought it in 1896. The 13-person board is chaired by AG Sulzberger, who is also the publisher of The Times.
Danielle Rhoades Ha, a spokeswoman for the Times, said in a statement that members of the company’s management team had held talks with ValueAct to exchange views.
“The board and management will continue to make decisions that we believe are in the best interest of the company and all of the company’s shareholders,” Ha said in the statement.
Unlike some other activist investors — such as Carl Icahn, who made a name for himself with bruising courtroom battles — ValueAct has a track record of investing in companies over a long period of time and working with management behind the scenes. Often it seeks out companies, such as Adobe and Microsoft, which are in the process of changing their business models.
Activist investors have been increasingly willing to take stakes in companies with dual-class structures such as The Times. Activist firm Elliott Management disclosed a position at social media company Pinterest in August, and activist firm Blackwells Capital pushed for the ouster of Peloton CEO John Foley this spring.
The Times has covered activist investors in the past. In 2008, hedge funds Harbinger Capital Partners and Firebrand Partners told the company that they intended to nominate four independent directors to the publisher’s board. The Times eventually struck a deal with the investment companies, offering two board seats.
