Canwest, worth nearly $14 three years ago, is now probing toward $1.50, hitting another all-time low today.
This is an over-leveraged company that faces a strike at one of its largest papers, the Montreal Gazette. I still expect it to be de-leveraged and broken up, putting an end to the concept of media convergence in Canada.
When the company is broken up and sold, I don't know how the shareholders will fare. The market seems to think equity holders won't get much. I'm willing to bet a few thousand that this stock is worth more than a buck and a half, but I'm not touching it until the market settles a bit.
As I said fourteen months ago and re-posted below, the credit crisis will have a profound effect on Canadian media and journalism. I believe in the end it will be a good thing, as these huge, broadcast-dominated chains are taken apart and reconstructed with newspaper assets in stand-alone companies. Newspapers will make money. They'll change, but they'll still turn a profit.
But there's going to be a lot of blood and pain along the way.
David Asper has the gall to tell Canadians things are just fine, thanks.