NY Times Fighter Gives Up

Updated from 12:47 p.m. EDT

Hassan Elmasry, the portfolio manager with Morgan Stanley Investments who led a campaign to wrest control of New York Times (NYT Quote) away from chairman Arthur Sulzberger and his family, has sold his fund's stake in the newspaper publisher, according to a source close to the firm.

The source says the investment arm of Morgan Stanley(MS Quote) sold its 7.2% stake in New York Times, equal to more than 10 million shares, on Wednesday morning. Regulatory filings confirming the sale will be made public in the next few days.

A spokesman for Elmasry declined to comment.

Shares of New York Times recently were down 62 cents, or 3.3%, to $18.29, hitting a 52-week low.

The sale marks the end of the most aggressive attempt by investors to loosen the Sulzbergers' grip on the publishing company, which would clear the way for a sale of the company or some of its assets in order to generate returns for discouraged shareholders.

Shares of New York Times have lost more than half their value over the past five years as the rise of the Internet has spurred a decline in circulation and advertising revenue. The U.S. housing slump has only exacerbated the deterioration.

While the newspaper industry is suffering across the board, investors have complained that New York Times has ignored the interests of shareholders in favor of its editorial mission.