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‘An atomic bomb for local news’: Metro Media shuts down all publications

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The abrupt closure of the Métro Média group, which includes more than twenty hyperlocal publications in Montreal and Quebec City, is a real “atom bomb” for local news, according to several observers of the Quebec media landscape.

Shortly after 4:30 p.m. on Friday, the company’s president and CEO, Andrew Mulé, announced to his employees, colleagues and collaborators “the immediate suspension of operations of Métro, all (its) newspapers and (its) community websites.”

“Time was my worst enemy, and what I feared has unfortunately happened, albeit abruptly and suddenly,” lamented the publisher, who says he was informed on Wednesday that the company no longer had the necessary liquidity to continue operations, despite a “healthy balance sheet.”

According to Jean-Hugues Roy, professor at UQAM’s École des médias, the shuttering of Métro Média’s publications is both “sad and expected.”

“It’s even tragic … It’s an atomic bomb for local news in Montreal and Quebec City,” he said in an interview.

“It’s a piece of journalistic history, but also of certain neighbourhoods, that’s disappearing. Le Messager de Verdun celebrates its 110th anniversary this year … These are communities that rely on these newspapers as sources of information.”

A person holds a phone displaying the home page of Metro Media, which reads in French that the company is suspending activities, in Toronto, Friday, Aug. 11, 2023. THE CANADIAN PRESS/Giordano Ciampini

His colleague Patrick White agreed, even indicating that the province’s two largest cities will face media deserts.

“This is very, very bad news for local democracy,” he said in a telephone interview. “It’s the end of the hyperlocal coverage model in Montreal and Quebec City. We’re going to stop covering borough councils.”

“It’s not good news for society in general if we lose several voices covering the news,” added Éric-Pierre Champagne, vice-president of the Fédération professionnelle des journalistes du Québec. “When information doesn’t come out on top, it’s the public that loses out.”

He noted that the group’s weeklies covered a certain “blind spot” in the major Montreal dailies.

Annick Charette, president of the Fédération nationale de la culture et des communications (FNCC-CSN), described the announcement as “catastrophic,” even though she had been working closely with Mulé for several months to get the company out of its difficulties.

“It creates a big, big hole. For many communities, their weekly newspaper was a very important communication vehicle,” stressed Charette. “For many people, it was the only French-language news or publications that came into their homes.”

“We worked hard with the owners, we tried to find alternative solutions, we had meetings with several investors, the city … I hope that this closure will only be temporary,” added Charette, who, last May, had feared in a press release “the pure and simple disappearance of this local press” if no aid measures were brought to the company.

In a press release issued late Friday evening, the FNCC-CSN called for “immediate and constructive intervention” from all levels of government to save local news on the Island of Montreal.

Métro Média was created in April 2018 at the time of the acquisition of the daily Métro as well as 11 metropolitan publications and five publications from Quebec City region. Some of these publications were close to 100 years old.

According to statistics on the company’s website, the Métro newspaper reached 100,000 readers weekly. Its website had 1.9 million unique visitors every month and a total of 165,000 copies of all weeklies were distributed each month.

The company employed around 100 people, more than half of whom were unionized.

A few layoffs had taken place last winter and in recent weeks.

Reached via social media, Mulé declined an interview request from The Canadian Press, saying he had said it all in his message.

“This is very bad news for citizens. Access to local sources of information is important. The Ministère de la Culture et des Communications will continue to support local newspapers, as it has done for several years,” reacted the Minister of Culture and Communications, Mathieu Lacombe, a former journalist.

FINGER POINTED AT THE END OF PUBLISAC

The businessman pointed out that despite “a major and significant digital shift … Métro was dealt a particularly devastating blow when the Mayor of Montreal announced the end of our distribution method, the Publisac.”

“(We) couldn’t suffer a devastating loss of revenue suddenly and follow an ambitious and expensive digital roadmap without external financial help. We are, after all, a small company without funding, and the premature end of our print media meant that we had no way of quickly financing our future without a major investment,” wrote Mulé, adding that he has “spent the past year knocking on every door in Quebec and Canada” for help.

Last spring, Mulé had threatened to lay off half of his employees without financial support from Montreal due to the suspension of distribution of his newspapers through the Publisac.

On X, formerly known as Twitter, Montreal Mayor Valérie Plante expressed her sadness about the closure of the media outlet. Calling it “a major loss for the media ecosystem and the daily lives of Montrealers,” the mayor did not respond to Mulé’s criticism of his decision to end Publisac distribution.

“The radical transformation of the media business environment calls for urgent reflection and collective solutions,” Plante said, praising the work of the Métro Média group.

This comment seems to have stung Andrew Mulé to the core, as he retorted that “the beauty of communicating on social media [is the] total control of the message upon publication without the need for independent fact-checking. Good luck with that Montreal.”

A BUSINESS MODEL TO REVIEW

However, Jean-Hugues Roy is not surprised by the setbacks of Métro Média, which had been trying for several months to survive, notably by attempting to transform itself into a cooperative.

“The Publisac argument, when you consider that a judgment was handed down just over a month ago, shows above all that the information business model, which is dependent on advertising, no longer works,” he says. “Advertising can no longer be the sole or main source of revenue to finance news.”

“It’s an old business model that we tried to modernize with a digital shift,” White said. “We knew it wasn’t easy and that stopping newspaper distribution hurt a lot.”

Roy fears that other media, still dependent on this business model, will follow Métro Média’s footsteps in the coming months.

“A lot of newspapers, including in the regions, are still distributed by Publisac. We have one voice that’s dying out, but several others could.”

This report by The Canadian Press was first published in French on Aug. 11, 2023.  

 

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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