Shares of The New York Times (NYSE:NYT) surged 19.3% last month, according to data provided by S&P Global Market Intelligence. The venerable newspaper is enjoying surging subscriber growth since President-elect Donald Trump's Election Day victory.
The New York Times announced on Nov. 17 that it added 41,000 paid print and digital subscribers in the seven days after Election Day, the largest one-week subscription increase since the company launched its digital pay model in 2011. The company added that it experienced a "dramatic rate of growth" in subscriptions compared with the week before the election and the year ago period.
"Our newsroom did exceptional work throughout the campaign and they have continued to provide our readers with penetrating and comprehensive coverage of the incoming administration," said CEO Mark Thompson in a press release. "The result has been record-breaking audiences and tens of thousands of new subscribers -- clear evidence of how much public demand there is for high quality, deeply reported, independent journalism."
Later in the month, the company reported that its subscriber gains had accelerated. The New York Times told CNBC that from the election on Nov. 8 through Nov. 26, the Times saw a net increase of approximately 132,000 paid subscriptions to its news products, representing 10 times the rate of growth compared to the prior-year period.
In addition to America's increased appetite for political coverage after the recent election, The New York Times' subscriber growth announcements come at a time when many are pondering the impact of fake or biased news stories on the internet. As such, it's likely that the Times' reputation as a trusted source of news is helping fuel its recent results.
Still, challenges remain. Print circulation and advertising revenues continue to decline as more Americans turn to the internet for their news consumption.
To counter this long-term trend, The New York Times is investing heavily in its digital initiatives. The company plans to spend $50 million over the next three years to expand its digital audience, with a focus on international markets. The company believes these investments will help it grow its digital revenue to $800 million in 2020, up from $400 million in 2014. How successful The New York Times is in achieving those goals will go a long way toward determining the returns it delivers to its shareholders in the years ahead.
Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends The New York Times. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.