My guess is Buffett is intimately familiar with the publishing business and new this revenue "crossover" would take some time to play out. With the duration/uncertainty of that crossover transition he likely felt the 9% return on the debt (with the business as collateral) was a better return than the equity at that time.
Always scary to invest when cash flow from operations keep falling... the stock reminds me of NZME, which is similarly cheap and also trying to engineer a shift to digital
Hi,
Thank you very much for this analysis.
Do you have any idea why Berkshire agreed to such a long maturity? 25 years seems unusual to me, especially for a pivoting business.
My guess is Buffett is intimately familiar with the publishing business and new this revenue "crossover" would take some time to play out. With the duration/uncertainty of that crossover transition he likely felt the 9% return on the debt (with the business as collateral) was a better return than the equity at that time.
Always scary to invest when cash flow from operations keep falling... the stock reminds me of NZME, which is similarly cheap and also trying to engineer a shift to digital