Technology-focused hedge fund SoMa Equity Partners told investors on Monday that one of its best investment ideas is a stake in The New York Times Company.
Leslie Picker at the Sohn conference in San Francisco. “What you’ve actually seen is a pretty significant evolution in the business model of news, and really, The New York Times is at the forefront of that.”
Simon, once the chief investment officer of Apex Capital, likened the news organization’s new model to that of up-and-coming music streaming services, which rely heavily on consistent revenue base.
“What you’ve seen is the business moving from an analogue, advertising-based business to an internet-based, subscription business,” he added. “And interestingly, that’s actually a better business model because it’s all recurring revenue and it’s digital distribution. So, it’s been a little while in the making, but similar to what you’ve seen with Spotify in music, you’re actually seeing a similar trajectory for news.”
The New York Times Company’s stock has climbed nearly 34 percent this year, far ahead of the S&P 500’s 1.2 percent decline.
Speaking about the current political discourse, Simon said that he and his colleagues believe that the election of President Donald Trump has brought more people into the political sphere than there had been in the last 20 years, or even since the Vietnam War.
“More people have skin in the game again, when you think about the issues beyond just who’s the president,” he said. “It’s some of the Supreme Court issues, it’s Roe v. Wade, it’s much deeper than just one person and so there’s an ongoing debate. We think that there’s an elevated news cycle now that (is) probably generational.”
The Sohn conference is the West Coast version of the investment conferences that began in New York and are best known for hedge-fund managers making market-moving presentations. Presented in partnership with CNBC, the Sohn conferences benefit pediatric cancer and other causes for underserved youth.