Gannett Stock Soars On Otherwise Blue Monday For Segment

Fitz: Against all expectations, Gannett Co. stock (NYSE: GCI) is soaring Monday. By 12:30 EDT, GCI was up 21.6% on an 81-cent gain to $4.55. Trading in GCI has been furious, with a volume at midday  of 13.2 million -- nearly twice the number of shares that trade in an entire session.

All this action is coming on a day when The Wall Street Journal published a story saying Gannett’s first-in-the-industry Q1 report on Thursday is expected to kick off  news from “the ugliest quarter in recent memory.”

So why the rush to GCI? The immediate speculation is that short sellers are being squeezed and forced to cover their positions. About 30% of GCI is shorted, according to shortsqueeze.com. Unfortunately for the shorts, who profit on stock declines, GCI has been buoyed by good news in recent days. Ariel Capital Management doubled its shareholdings, and Gannett announced a bond swap that will stretch out the maturities of its long-term debt.

Short-sellers had been banking on the trouble at Gannett, whose debt is not particularly high, but which was due to mature all at once by 2012.

Gannett’s rise doesn’t appear to be catching. The rest of  the newspaper sector is down, with the exception of Lee Enterprises (NYSE: LEE), which was up 10% on a 4-cent gain to 40 cents.