Seeking Alpha

Newcastle completes New Media spinoff

  • New Media (NEWM) will begin trading on the NYSE today after being successfully spun off from Newcastle Investment (NCT) last night. Owners of Newcastle have been issued 0.07219481485 shares of New Media stock for each share of Newcastle they own.
  • In when-issued trading, New Media closed at $12.67 yesterday.
  • Press release
From other sites
Comments (12)
  • crl1603
    , contributor
    Comments (309) | Send Message
     
    anyone have any thoughts on whether new media is worth keeping. thank
    14 Feb 2014, 09:24 AM Reply Like
  • fire0nice228
    , contributor
    Comments (48) | Send Message
     
    I'm gonna hold it and see what happens for awhile.. Not that at .07 I got a whole pile of shares in my account..
    14 Feb 2014, 09:28 AM Reply Like
  • crl1603
    , contributor
    Comments (309) | Send Message
     
    what exactly is new media, anyone know
    14 Feb 2014, 09:46 AM Reply Like
  • taxman100
    , contributor
    Comments (363) | Send Message
     
    New Media is the assets Newcastle acquired as the debtor in possession related to debt position they owned. New Media is basically small neighborhood newspapers and local web advertising. The old owners took on way too much debt in an attempt to expand and then the recession hit them at a very bad time.

     

    Surprisingly this area of print media is pretty profitable. Since it really doesn't fit with retirement housing they spun it off.

     

    I'm holding as the yield should be pretty good.
    14 Feb 2014, 11:05 AM Reply Like
  • stuschu
    , contributor
    Comments (2) | Send Message
     
    I was wondering the same thing...is it worth keeping? Last December I kept hearing talk that it was going to be 1 share for every NCT share. I had a 1000 shares of NCT giving me 72 shares of NEWM nothing great but better than 100 shares and getting 7. I think I will ride it out for awhile and see what happens.
    14 Feb 2014, 11:19 AM Reply Like
  • User16878792
    , contributor
    Comments (6) | Send Message
     
    There is a nice presentation about the NEWM spinoff, its objectives and holdings on the NCT investors website.
    14 Feb 2014, 11:20 AM Reply Like
  • fire0nice228
    , contributor
    Comments (48) | Send Message
     
    How do I figure out how much of NEWM is worth the drop in price of NCT shares? They were supposed to start trading at $11.00 so I figure thats a number I should be using, but I dont know...?
    14 Feb 2014, 01:40 PM Reply Like
  • Alex2322
    , contributor
    Comments (328) | Send Message
     
    NEWM will be great if they can buy out advertising simply put they need more digital presence for this stock to rise.
    14 Feb 2014, 03:49 PM Reply Like
  • bonneville750
    , contributor
    Comment (1) | Send Message
     
    New Media seemed to be about the same price as the losses on NCT most of the day. Looks like a lateral swap to me.
    14 Feb 2014, 04:59 PM Reply Like
  • Len Friedman
    , contributor
    Comments (68) | Send Message
     
    I sent NCT's investor relations people asking if the spin-off was more complicated than merely applying the multiplier (.07219 etc.) The precipitous drop in NCT is unusual. In response to a query above, I am holding 9,200 units of NCT and received 664 units of NEWM. I'm ahead about $500, thanks to the new addition despite the 14% loss incurred in NCT. All told, I know I'm better off but with this caveat: All you need to do to determine the overall value-added AS OF TODAY is to compare your portfolio value coming from the NEWM position to the amount of NCT loss.

     

    I sense there is good reason to assume NCT did this deal as it's consistent with representing unit holder interests and this is expected to be accretive. There has been talk of a 20% ROI but I'd be happy with 7% or better, consistent with NCT results. Without benefit of holding and watching, I'm going to sit on this for awhile until I can sense some sort of attitudinal bias evident through day-to-day trading. Once it's clear, it becomes far easier to gauge momentum or "driving energy."
    14 Feb 2014, 05:01 PM Reply Like
  • User 8313431
    , contributor
    Comment (1) | Send Message
     
    What is the basis of NEWM? I heard $12.80 and $13.16.
    19 Feb 2014, 04:29 PM Reply Like
  • Len Friedman
    , contributor
    Comments (68) | Send Message
     
    The cost basis will be based on your aggregated prices paid when accumulating your position. Look at this from a profit-loss perspective, factoring in your purchases and then figure out how your original NCT share value was compromised as a result of the spin-off. My cost basis is $13.12, so your $13.16 is close enough, I think---unless you're thinking along tax lines. Ameritrade offers something called "Gains Keeper." This tracks the cost basis and computes considerations critical to managing taxes and the like. My CPA makes full use of the program and my extremely complicated tax preparation comes out surprisingly inexpensive, thankfully.
    23 Feb 2014, 02:09 PM Reply Like
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