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Gannett, the parent of USA Today and hundreds of other newspapers in the U.S. and U.K., completed the spinoff of its TV and digital businesses into a company called TEGNA, and the two stocks went in opposite directions on their first day of trading.
Shares of Gannett fell 5 percent Monday to $14.13, leaving the publishing company with a $3.2 billion market capitalization while shares of TEGNA rose 5 percent to $31.63. Prior to the split, Gannett’s market cap was $8.43 billion.
TEGNA, which got its name from rearranging some of the letters in “Gannett,” owns and operates the No. 1 group of affiliates of both CBS and NBC and the fourth biggest for ABC. It also owns Cars.com and has a controlling interest in CareerBuilder.
As of Monday, Gannett and TEGNA each trade on the New York Stock Exchange, the former under the ticker symbol “GCI” and latter under “TGNA.”
The tax-free structuring of the spinoff allowed shareholders to keep their former shares, though those shares are now of TEGNA, plus for every two of those owned they received a share of Gannett.
On Monday, Barrington Research gave TEGNA an “outperform” rating and $42 price target. The stock is also on Barrington’s “Best Ideas List.”
“TEGNA’s presence in major markets including a number of swing states positions the company well for political advertising, and its NBC affiliates provide it with significant exposure to Olympic dollars,” Barrington analyst James Goss wrote in a research note Monday.
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