Media, gambling and travel are the big investments, even as layoffs and furloughs hit Alden’s newspapers across the country

 

By Julie Reynolds

While the rest of the country tightened its belts in the face of the global pandemic, Alden Global Capital has been on a shopping spree.

The hedge fund that owns the country’s third-largest newspaper chain spent nearly $124 million from January to March to buy shares in dozens of publicly traded TV and media companies, Las Vegas hotels, airlines, financial services and gambling firms, according to an SEC filing posted Friday.

Alden, which is poised to take over or merge with Tribune Publishing, appears to be expanding its investments in other media companies, although it dumped some of its holdings in the rival Gannett newspaper chain, now merged with GateHouse.

At the end of 2019, Alden held $193 million in public stocks. The $124 million in new stock purchases during the first quarter of this year has increased that total to nearly $317 million.

Media purchases include:

  • 1,015,300 shares of Sinclair Broadcasting, worth $16.3 million
  • 57 million shares of newspaper chain Lee Enterprises, worth $3.5 million
  • 108,893 shares of the W. Scripps Co., worth $821,000
  • 986,300 shares, of Gray Television Inc., an Atlanta-based chain of TV stations, worth $10.6 million
  • 821,200 shares of Viacom-CBS, worth $11.5 million
  • 262,300 shares of Nexstar Media Group, a Texas-based chain of 196 TV stations, worth $15.1 million

The hedge fund decreased its stake in Gannett from 4.76 million shares, worth $30.4 million, to 3.4 million shares, now worth just over $5 million.

And while it hasn’t decreased the number of Tribune Publishing shares it owns — 11.544 million — their value has dropped from $151.9 million at the end of 2019 to $93.6 million at the end of March.

Alden added to its initial purchase of Lee newspapers stock, made in late January when it acquired 5.9 percent of the company’s total shares. Alden now owns 3.57 million shares, up from 3.44 million in late January. But their value has fallen, from $9.2 million when Alden first bought to $3.5 million now, even with the addition of 130,000 more shares.

Alden also picked up a few shares of American Outdoor Brands, the parent company of Smith & Wesson firearms, going from 455,00 shares to 468,900. But the value of Alden’s investment in the gun manufacturer dropped from $4.22 million to $3.89 million, again, despite increasing total shares.

None of the new purchases gives Alden a controlling stake in the companies. While the purchases clearly show investments in industries doomed to struggle in coming months due to the coronavirus pandemic — airlines, hotels, news media, casinos — its end game in making these buys isn’t yet clear. But as a vulture hedge fund, Alden’s self-professed specialty is investing in “distress,” so this 2020 portfolio certainly fits that criteria.

Three days after its free-spending first quarter of the year ended, Alden’s newspaper chain MNG Enterprises (aka Digital First Media) swiftly laid off, furloughed or bought out scores of employees across the country.