“The New York Times” saw its stock prices drop by 12% following the release of its fourth-quarter financial report last Wednesday (February 5), falling below $50 for the first time since last summer to settle at $49.23. The renowned publication ranked second on the “Wednesday biggest losers list” on the financial website, Insider Monkey.
According to Jabin Bastian, co-founder of the financial technology company StockStory, The New York Times has shown weak performance with only a 7.4% annual revenue growth over the past five years, failing to meet the benchmark of the Consumer Discretionary Sector.
Despite reporting a year-over-year revenue growth of 7.5% in the fourth quarter of 2024, with total revenue increasing from $676 million to $727 million, The New York Times’ stock price continued to decline.
Analyst Doug Arthur from the independent stock research and consulting company, Huber Research, suggested that one reason for the stock price decline could be the publisher’s media expenses, which increased by 46% compared to the same quarter.
According to the latest financial report released by the media company, sales and marketing expenses reached $82.9 million, a 21.3% increase from $68.3 million in the fourth quarter of 2023, mainly attributed to rising marketing and promotion costs.
Media expenses, as a component of sales and marketing costs (i.e., costs related to promoting subscription business), increased from $31.8 million in the fourth quarter of 2023 to $46.4 million in the fourth quarter of 2024, a 46.0% growth.
The media company reported that digital subscribers increased by 350,000 in the last quarter, bringing the total online subscribers to 10.8 million.
Despite the increase in subscriber numbers, investors have lost confidence in The New York Times due to its significant expenditures, including expenses related to some of the media’s legal battles.
The company’s report stated that pre-tax litigation expenses related to the lawsuits against Microsoft and OpenAI amounted to $3.2 million. The New York Times filed lawsuits against both tech companies in December 2023, accusing them of illegally using its news reports to aid in developing artificial intelligence (AI) products.
As of the latest report on Thursday (February 6), the media company’s stock prices continued to decline, reaching $48.97 per share.