“A weekly newspaper publisher in Northern California is selling stock to its readers, who hope to save their paper and, some of them believe, democracy,” as The New York Times is reporting.
“Last year Rollie Atkinson, the owner and publisher of The Healdsburg Tribune and three other weeklies in Sonoma County, was staring down a grim financial reality. The business model, he said, was ‘failing rapidly.’ He was tired of throwing his savings into the newspapers to keep them going, and weary of the ‘daily struggle’ of staying afloat in an environment where readers have access to a torrent of information for free.
“In what is believed to be a first for a local newspaper, Mr. Atkinson undertook a [direct public offering] for the four newspapers that make up his Sonoma West company, which have a combined paid circulation of 9,900: The Healdsburg Tribune, The Cloverdale Reveille, The Windsor Times and Sonoma West Times & News. Since March, he has gotten a quarter of the way to his goal of $400,000.”
The prospectus, including the profit and loss statement, is here.
I noticed it said:
“A summary of the risks includes:
- The Company faces competition from much larger, better resourced companies.
- The online news business is highly dynamic, and the Company’s success will depend on its ability to develop and commercialize new products.
- The Company may be adversely affected by changing technology and consumer habits.
- The Company relies heavily on key personnel.
- The Company has been limited historically by under-capitalization.
- The Company may need to raise additional capital.
- The Company has not engaged any financial advisors.
- The Company is not required to pay cash dividends to investors.
- Investors have limited opportunities for exit.
- Investors have very limited voting rights.
- Technology failures or natural disasters could adversely affect the Company.
- The Company could be in a position in the future of needing to acquire offset printing services in the event its current supplier goes out of business.
- The offering price of shares of Preferred Stock is arbitrary.
- The Company may revise the use of proceeds of this offering.
- No tax advice is being given related to this offering.
- The Company’s legal counsel has not conducted any due diligence with respect to the offering.”