Big news and financial information company Reuters (RTRSY) just hit a 52-week high, moving over $55. That is quite a contrast to the $10 price in 2003. Then cancellations of its quote/news terminals driven by lackluster markets and low brokerage profits hammered the stock from a 2000 high of $141.
But, the CEO Thomas Glocer kept working the cost base down. And, Reuters improved its offerings compared to arch-rival Bloomberg. Another large competitor, Bridge Information Systems, fell into bankruptcy.
Now that some of the weaker players are out of the market, Thomson Financial has decided to try to move in. It is increasing its news feed to deliver 10,000 stories a day. That is an increase from 2,000. The company now has 500 reporters.
No one likes competition, although companies talk about how healthy it is all the time. Having competition "validates" a company’s business model. Of course it doesn’t. It just costs firms their customers and drives down margins.
All at a time when Reuters is on top of the world.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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