New York Times stock price

On Friday, both the New York Times and Harbinger filed their preliminary proxy statements with the SEC. One thing that piques my interest in the Harbinger filing is the disclosure of an equity-swap deal Harbinger has made with a London company doing business as TradIndex.

On January 17, around the time the NYT price was hitting $15. "TradIndex agreed to pay the Special Fund an amount equal to any increase, and the Special Fund agreed to pay TradIndex an amount equal to any decrease, in the official market price of 320,455, 300,000 and 390,480 notional shares, respectively ...."

This sounds like a "contract for difference," a way of separating voting interest from the economic significance of stock ownership. I'm guessing (and that's all I'm doing at this point) that Harbinger entered into the deal to protect itself against the further decline in the value of Times' stock that it plans to use to get some seats on the Times board.

It certainly had reason to worry, based on the charts. In June of last year, the stock price of the New York Times was at $26. That was a gain of $4 per share from its value as of a year before. But it was not to last.

By August the stock (NYSE: NYT) was back at summer of 2006 levels. It continued to fall, right through them.

By mid-October, it was near $18, then rallied briefly, up to $21, before falling back to $18 at the start of November.

Once we were into the new year, the newspaper company reported a December revenue drop off of 22.4%, and the stock price quickly came to reflect this news, getting to below $15 in mid-January. That, as I say, was when Harbinger entered into this hedge.

There's been something of a rally since then, in part at least because the January revenue results were an improvement over those for December, and in part because of the interest Harbinger and Firebrand have show. The price is now back above $18. So it appears that Harbinger could close out its deal with TradIndex for a profit.

Nothing untoward about this -- it all seems to be a Marquis of Queensbury proxy fight, and civil enough so far to sound like some of the Clinton/Obama debates. Should somebody get Mr. Sulzberger a pillow?

Still, the whole idea of CFDs and the separation of economic from voting interest raises policy/regulatory issues.