New York Times (NYSE: NYT) board members may be in for a fight after two large shareholders announced that they will nominate four candidates to the company’s board of directors on April 22nd. The candidates would occupy the four board seats that are elected by regular Class A shareholders while the superior Class B shares - held by the Ochs-Sulzberger family - would appoint the other nine and retain control of the company. Regardless, shareholders are hoping that the four candidates could bring change to a troubled company.

Janet Robinson of Harbinger Capital Partners and Firebrand Partners announced that they were submitting the proposal in a spirit of “cooperation with the board and management that moves beyond the old dichotomy of ‘hostile’ and ‘friendly’”. The hedge funds said they would not pursue a change in the dual class shareholder structure that has garnered so much complaint, but would push for change in a board that “has not been effective in inspiring the requisite bold action this media environment demands”.

The hedge funds demanded that the company immediately take action to redeploy capital to acquire more digital assets, including content and distribution platforms. Many investors have long complained that the New York Times was simply falling behind the times by ignoring key Internet and digital trends and failing to make acquisitions to drive growth. To this end, the hedge funds are bringing on at least two directors with experience in Internet media to help drive the company in the right direction.

In the end, the New York Times still faces a number of key issues that it must solve before it can be considered a good company and investment. The dual class voting structure, which came under fire last year, is still a major problem. However, now investors realize that it is impossible to combat it. Consequently, these hedge funds are now focusing on the next problem: the failure to embrace the digital revolution. To this end, the investors are nominating board members with broad experience in this arena to drive management to focus in on these areas. Combined, these factors make NYT a stock worth watching!

Related Companies
Media General, Inc. (MEG)
Gannett Co., Inc. (GCI)
News Corporation (NWS)

Alliance Data Systems (NYSE: ADS) shares dropped a staggering 35% yesterday after the Blackstone Group (NYSE: BX) announced that the conditions for their merger agreement would likely not be met. In reality, there is little in the way of a bank acquisition other than a price tag of $81.75 that may now look a little rich in today’s environment. However, this massive drop does open the door for other investors seeking an outstanding company at a very reasonable price. Many investors are hoping that the company will be able to attract a new offer at this point given the price.

ADS is a provider of loyalty and marketing solutions derived from transaction rich data. The company partners with its clients to develop insight into consumer behavior and leverage that insight to cretae and manage customized solutions and enable clients to build stronger mutually-beneficial relationships with their customers. These services include AIR MILES Reward Program and private label credit card programs for retailers. The company has two bank subsidiaries to manage the latter and the lack of approval from bank regulators reportedly killed the merger deal.

ADS now trades at just 9.9x consensus 2008 EPS - extremely cheap for a company that has a historical five-year growth rate of 21% for revenue and 40% for EPS. Moreover, the company has not reported any problems related to the credit markets or slowdown in the economy. In fact, ADS has reported two strong quarters and has preannounced results for the fourth quarter that are right in line with expectations. The point investors have to consider is that the company’s stock is suffering because of Blackstone’s failtures, not because of any internal problems or growth issues.

The drop seen yesterday was no doubt the result of selling by arbitreurs who were attempting to profit from the difference between the current price and buyout price. There are also many short-term hedge funds and program traders that try and take advantage of such situations. Combined, these factors make ADS a stock worth watching!

Related Companies
Total System Services (TSS)
Acxiom Corporation (ACXM)
Constant Contact Inc. (CTCT)

Current Media, a cable TV company co-founded by Al Gore, filed for a $100 million initial public offering today. The news comes after a surge of interest in startup companies engaged in the convergence of conventional media and the Internet. Current Media’s CurrentTV was founded in 2002 and launched in 2005 as a 24/7 cable and satellite TV network that relies heavily on user/audience participation. - what they term “Viewer Created Content”.

Current Media’s S-1 IPO filing with the SEC did not disclose the expected offer price or other details, but recent stock grants value the company at around $11.46 per share. As a result, an IPO range of around $13 to $15 per share can be expected with around 7 million shares sold. It will be interesting to see whether a non-profitable startup company will be able to obtain a $100 million valuation in today’s market despite the harsh credit environment and bearish sentiment.

Current Media did give some firm details into the company’s financial conditions in the filing. In 2007, the company had revenues of $63.7 million and a net los of $17 million. Interestingly, only 16% of its revenues were from advertising while 84% came from affiliate fees paid by cable and satellite operators. Through partnerships with Comcast, Time Warner, DirecTV, Dish, Sky and Virgin Media, CurrentTV is reaching more than 51 million households in the United States and United Kingdom.

There are a few issues that investors must confront, however, before investing in this company. First, Chairman Al Gore and CEO Joel Hyatt each earned $1.05 million in salary and bonus in 2007 - perhaps a bit excessive for a startup that is non-profitable. The company also had to restate their consolidated statement of cash flows for 2005 and their consolidated balance sheet in 2006 in what their disclosures say “are evidence of a significant deficiency in internal controls”. Shares in the company are also dual structured, which means that founders control more votes. And finally, the copmany has about $2.2 million in cash with about $36.5 million due in May.

In the end, this is an IPO that is ready to hit a market that is hungry for citizen journalism and social media. It will be interesting to see how the market reacts a startup during today’s bearish sentiment, but Al Gore’s influence will likely help push it higher. Combined, these factors make Current Media and IPO worth watching!

Related Companies
Time Warner Inc. (TWX)
Comcast Corporation (CMCSA)
Apple Computers Inc. (AAPL)