Update: It fell through a buck today. The Aspers must do something if it stays below a buck, either pull a Nortel and make a 10 to 1 swap or do a company share buyback. The latter is very unlikely, since they have no money. But if something doesn't happen, the stock could eventually be forced off the main exchange and on to the over-the-counter market.
The company is supposed to post results at the end of this month, so that may be the time of some sort of action.
Reuters moved a story on Canwest's share decline today.
This is sad, and I hope there's no impact on the people who work for Canwest. And there shouldn't be. We're talking about, over-all, the best newspaper properties in Canada and a pretty good regional TV network. This is a question of leveraging, the belief the company carries far too much debt. There also seems to be little market enthusiasm for David and Leonard Asper.
Yesterday, a Canwest manager who I respect quite a lot reminded me about the many good people who work for Canwest, decent journalists who just want to raise families, pay mortgages and be proud of their work. I hope every one of them comes through this OK.
We are on the edge of history, probably just a few weeks or months away from more economic events that none of us thought we would ever see. We're already in the middle of the worst banking crisis since 1933 and layoffs have started in the economy. John Budden, a pretty shrewd investment specialist in Ottawa, noted on CFRA yesterday that ship owners have cut their rates by 80% on the big ships that use the Cape Horn route from Asia to Europe and America. That means nothing is moving.
The Financial Post carried a story today about the collapse of palladium, down to one-sixth of what it was worth a year ago. It happened because the speculators have been toasted and the car industry, which uses the stuff, has simply seized up.
Getting back to Canwest. I think it's a steal at $1.10. I think anyone with a few thousand dollars they can afford to play with should buy some of it. The market says the company has almost no equity value. But the market has been wrong before.