NEW YORK Nov 20 Media General Inc (MEG.N) shares lost as much as 54 percent of their value on Thursday after a dissident investor sold stock in the newspaper publisher and October classified advertising revenue fell 38 percent.
Hedge fund manager Philip Falcone cut Harbinger Capital Partners's stake in Media General to 16.67 percent from more than 18 percent, according to a filing with the U.S. Securities and Exchange Commission.
Harbinger got directors elected to Media General and the New York Times (NYT.N) earlier this year after criticizing the management at both companies on their Internet strategies and for not paying enough attention to non-family shareholders.
Media General, which publishes the Tampa Tribune and Richmond Times-Dispatch, along with other papers, has two classes of shares. The second, stronger class is held by the Bryan family. The Ochs-Sulzberger family holds a separate class of shares that give it control of the New York Times Co.
A spokesman for Harbinger had no immediate comment.
Media General's shares dipped as low as $1.36 from their close of $2.96 on Wednesday. They later recovered to $2.17, still down more than 26 percent.
Publishing division revenue declined 16.9 percent in October, and classified ad revenue fell 38 percent. Tampa, Florida, took a hard hit in classifieds, with help wanted ads down 58.5 percent, real estate advertising revenue down 49 percent and automotive revenue down 48.1 percent.
Overall revenue at Media General, which also owns local television stations and other papers in the southeastern United States, fell 5.8 percent to $85.9 million in October.
The decline was the second lowest monthly percentage decrease in 2008, a positive sign considering the sharper falls that many U.S. newspaper publishers are seeing.
Media General attributed the better performance to $21 million in political advertising revenue in October, the last full month of the U.S. presidential campaign.
Other newspaper publishers' shares also slid on Thursday, spurred in part by wider market declines brought on by tumult in world financial markets.
Washington Post Co WPO.N shares fell 4.55 percent to $353.65, while New York Times Co (NYT.N) shares fell 3.78 percent to $6.11. McClatchy Co (MNI.N), which reported a 20 percent drop in ad revenue in October 2008 compared with October 2007, was down a penny at $1.50. (Reporting by Robert MacMillan, editing by Dave Zimmerman)