Activist hedge fund Harbinger Capital disclosed in an SEC filing yesterday that it has sold 2.5 million shares of The New York Times Co. (NYT), reducing the company's largest outside shareholder's stake from to 14.6%. It also sold shares in September, when it reduced its position in the company from a 20% stake.
Harbinger declined a request for comment from The Wall Street Journal (subscription required), but it's possible that Harbinger is finally realizing that the shares' dual-class voting structure will make it impossible to affect change on the company's operations or corporate governance -- and as long as the Sulzberger family controls the company's fate, it will continue to be a value destruction machine trading at approximately the same share price it was at in 1984.
Back in January of 2008, Harbinger and Firebrand Capital Partners requested seats on the company's board of directors, and the stock rallied. In March, the New York Times Co. agreed to give Harbinger two seats on its board of directors, but nothing material appears to have come out of that decision. At the time, I wrote that "The New York Times Co. has a dual-class voting structure, so the Sulzberger family controls 10 directors while the outside shareholders elect 5. So Harbinger and Firebrand control 2 out of 15 directors and the maximum any shareholder could ever dream of electing is 5 out of 15 directors." I predicted that "This quixotic activist campaign, however noble, is likely to result in a big fat nothing."
So far that seems to be how it's gone down, and two major stock sales in three months suggest that Harbinger is getting bored with it, and is bailing out at a substantial loss. That probably shouldn't be of much concern to shareholders though, because Harbinger was always an over-reported non-factor in the company's future anyway.
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