TorStar, the company that owns the Toronto Star, has seen its stock plummet to historic lows. This came after the company reported an unexpected loss of $40.9 million. This financial hit is so extreme that the company may have to shift the balance of power amongst the company’s shareholders, according to BNN Bloomberg.
The company’s publicly traded shares dropped to 53 cents, the lowest ever for TorStar. By midday, the shares had recovered to 60 cents, largely due to TorStar’s damage limitation tactics, including telling shareholders the company will weather the storm.
TorStar’s Chief Executive John Boynton has told analysts that the newspaper is looking to diversify their income so to mitigate the decline of print sales. Although TorStar continues to report losses, Boynton is said to be content with their subscriber revenue, stating that it now represents a large portion of their revenue base.
TorStar continues to make $30.2 million from online and print subscriptions, which is an improvement from 2018 where they made $29.6 million.
Despite the Trudeau government’s media bailout, which allocates $115,000 per week to the Toronto Star, the newspaper’s financial difficulties have hardly been offset by the government’s subsidies.
The Toronto Star previously blew tens of millions of dollars on a tablet version that was later scrapped. Star Touch reportedly cost $14 million in prelaunch costs alone.
What will come as an additional concern to TorStar’s shareholders is that the PostMedia Network, TorStar’s main competitor, has reported its first profit in two years, with $7.9 million in net income.