The magazine company drops four percent in early trading Monday
Bumpy road ahead for Time Inc. spinoff?
Time Inc. had an inauspicious first day of trading on the New York Stock Exchange as an independent company spun off from Time Warner. Shares fell more than four percent, dropping to $22.40.
The company, which publishes more than 90 magazines including People, Sports Illustrated, and Time, began the trading day with CEO Joe Ripp ringing the opening bell, but serious obstacles remain ahead.
The New York Times reported the company's editorial budget will be slashed by 25 percent with “deep cuts” in staffing and the company is dealing with $1.3 billion dollars worth of debt.
Ripp sent a memo to employees Monday reassuring them of the long term viability of the company.
“We have the best talent in the industry, we have strong cash flows and we have incredible brands,” Ripp wrote. “We have relationships with all of the country's leading advertisers, we are one of the best direct marketers in the world, and we have extraordinary reach. We have the power, the intelligence, the resources and the drive to succeed no matter what headwinds we may face.”
Read the full memo below:
There are moments in the life of any institution that will be remembered forever. Today, we mark one of those special moments in the history of Time Inc. This morning, we shall ring the bell at the New York Stock Exchange and a new registrant with the symbol TIME will start trading. We are once again an independent public company–the first time since January 1990 when Time Inc. merged with Warner Communications.
Much has changed since 1990. There is no doubt we face strong headwinds in this business. But when I returned to Time Inc. nine months ago, I said I believed this company could do incredible things. I remember the company that shaped the agenda for the nation. I remember the company that started HBO and revolutionized the way the country consumed video content. I remember the company that became the largest and most successful publishing company on earth. We are still that company.
Henry Luce, beginning with the idea that a weekly newsmagazine would help enlighten readers, built an institution that changed the world. From this historic day we embrace Luce's entrepreneurial spirit as we and the changing media landscape evolve. As stewards of this great organization, we shall determine its future.
I believe companies do great things because they reject the notion that they cannot. We have the best talent in the industry, we have strong cash flows and we have incredible brands. We have relationships with all of the country's leading advertisers, we are one of the best direct marketers in the world, and we have extraordinary reach. We have the power, the intelligence, the resources and the drive to succeed no matter what headwinds we may face.
As we begin this journey, I want to thank all of you for your extraordinary work over the past months. Managing change is incredibly hard but you have risen to the occasion and stayed focused and productive. We have a long road ahead and I am honored to be part of this great company as we build our future together.
I hope you will watch live as we ring the bell at the Stock Exchange this morning at 9:30AM ET.Click the viewing link here: https://nyse.nyx.com/the-bell/todays-bells-live. And later, we shall all celebrate our first full day as a publicly traded company.