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The Five Dumbest Things on Wall Street This Week

4. Penny Ante

The New York Times Co. (NYT) is feeling the pinch of aggrieved shareholders.

Big investors took a shot across management's bow this week by withholding 28% of votes from the company's board slate. A 5.6% holder, Morgan Stanley Investment Management, wants to eliminate the Class B stock that gives the Sulzberger family control of the board despite its tiny financial stake.

"MSIM believes that the dual-class voting at The New York Times Company, which is an exception to the general rule of one-share, one-vote, creates special privileges as well as responsibilities," the firm says in a Tuesday press release. "MSIM contends that the board and management at The New York Times Company have failed to fulfill these responsibilities effectively."

A look at New York Times' stock performance seems to bear the critics out. Shares of the publisher are down 5% this year and have lost half their value since they peaked in June 2002, as online rivals led by Google (GOOG) and Yahoo! (YHOO) have grabbed more ad dollars. The stock's plunge means that $1,000 worth of Times shares bought five years ago is now worth $610 or so, plus dividends of around $70.

The Times declines to comment on the board voting or on Morgan Stanley's claims. But the company did reach out to shareholders in a gesture that seems characteristically half-baked. On Tuesday afternoon, the Times raised its quarterly dividend by a penny a share, to 17.5 cents.

"We are pleased that in a challenging advertising environment, the company has remained committed to improving shareholder return through annual increases in our dividend," said Chairman Arthur Sulzberger Jr. "We have grown our dividend by a compound annual growth rate of 7.1% over the last five years. These dividend increases reflect our board's confidence in the Company's long-term growth prospects and our financial position."

Sorry, but it's plain to see that no one else shares that confidence.

Dumb-o-Meter score: 82. Sulzberger is looking a bit pound-foolish.

4 of 5

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