Crikey! Shares of The Washington Post Co. are on a regular tear right now, up 9% at $484.65, thanks in part to a Barron’s story that said the stock could nearly double.
The Post has a market value of $4.2 billion, but a sum-of-the-parts analysis suggests it is worth $8.5 billion. This analysis is based on the valuations of comparable public companies, not lofty and sometimes unrealistic “private market” estimates often favored by media-stock boosters. At $8.5 billion, the Post would trade for more than $900 a share.
The piece, “Washington Post Is Dirt Cheap,” suggests that the media company spin off its highly profitable Kaplan education service — the one that helps young people prepare for standardized tests. WaPo CEO Donald Graham is resistant to the idea, but the company is still a good value even if it keeps Kaplan, says Barron’s.
Traders seem to be taking the story seriously. Just check out this quote page.
(h/t Editor & Publisher)