Los Angeles Times Prepares Private Placement of Preferred Shares for NYSE Listing
The Los Angeles Times Media Group has opened a Series A convertible preferred stock private placement to qualified investors, aiming to complete a private sale before advancing to a listing on the New York Stock Exchange, with the proposed ticker symbol LAT.
The base size of this round is 50,000 shares at $5,000 per share, totaling $250 million, with the company able to increase it to 100,000 shares, capping at $500 million; the minimum subscription is one share at $5,000, open only to qualified investors as defined by U.S. securities law, and is not a public offering. The preferred shares target an annual interest rate of 7%, continuing until the listing; before the listing, they will automatically convert to Class A common stock at a conversion price set at a 25% discount to the future IPO price.
The new entity combines the newspaper founded in 1881, the Los Angeles Times studio, NantStudios virtual production, and NantGames esports into a single content platform. In 2018, Patrick Soon-Shiong acquired the Los Angeles Times and other California assets from Tronc for $500 million in cash plus assuming about $90 million in pension liabilities; the fundraising documents state that he has invested approximately $750 million since taking over, for the El Segundo headquarters, virtual studios, podcasts, news studios, and the Graphene content system.
Unaudited financials show projected revenue of about $237.6 million for fiscal year 2024, with a pre-tax net loss of about $48.08 million, an operating loss of about $41.79 million, and an adjusted EBITDA loss of about $25.46 million; for the first half of 2025, projected revenue is about $127.2 million, with a pre-tax loss of about $21.46 million. In 2024, print circulation revenue is $92.58 million, and print advertising is $35.57 million, together exceeding half of total revenue, while digital advertising is $24.49 million and digital subscriptions are $31.55 million; the total number of paid users for print and digital is about 500,000, with approximately 615 full-time employees. As of the end of June 2025, total liabilities are about $301 million, and shareholder deficit is about $209 million.
Nant Capital plans to convert up to $100 million of convertible debt owed to the group into up to 20,000 preferred shares at the price of $5,000 per share. The underwriting agent is Digital Offering, which previously managed the private placement and Reg A listing for Newsmax, charging about $300 per share for the private placement; the documents specify that no public offering underwriter has been locked in yet, and the NYSE listing is not a condition for this round of closing, with the ticker symbol LAT reserved only. In terms of control design, Soon-Shiong still holds voting shares, while preferred shareholders receive dividends, discounted conversion rights, and registration rights without transferring voting control.
In market mechanics, buyers are qualified individuals and institutions, while sellers are the loss-making newspaper and studio bundled together; the funding event is driven by the need to supplement operations, repay debts, and expand studios and esports, rather than a mature profitable company expanding production. The 7% coupon and 25% discount are intended to compensate for liquidity freeze and listing uncertainty; the beneficiaries are the controlling shareholders and platforms needing external cash, while the pressured parties are the main news business suffering from declining print advertising and traffic diversion due to AI, as well as preferred shareholders who cannot exit during the lock-up period.
Source: Public Information
ABAB AI Insight
Patrick Soon-Shiong's capital path has consistently been to "first use a private balance sheet to swallow assets, then package related companies into a publicly listed shell." In 2018, Nant Capital acquired the Los Angeles Times from Tronc for $500 million in cash plus $90 million in pension liabilities, having previously been Tronc's second-largest shareholder and briefly serving as vice chairman; the same method appeared in NantKwest's record-breaking biotech IPO in 2015, despite not having approved drugs, and in 2021 when NantKwest swapped shares with private ImmunityBio to become IBRX. After NantHealth went public, its stock price collapsed from a high point to mere cents, indicating that his record of selling "platform narratives" to the public market is asymmetric: while he can raise funds, he may not be able to generate profits.
The flow of money in this round is a debt swap plus operational blood transfusion. The maximum $100 million shareholder loan converted into preferred shares at the issue price effectively changes internal debt into external equity with a 7% coupon; the external $250 million to $500 million is needed to cover print decline, about $300 million in liabilities, and capital expenditures for virtual production, esports, and live events. The strategic motive is not to relinquish control but to mortgage the newspaper brand to the capital market in exchange for continued cash to feed Nant's studio system, while using Reg D private placements to inflate valuations, then following the same ladder of "first qualified investors, then Reg A, and finally NYSE" as Newsmax.
The benchmark is Newsmax: the same Digital Offering, the same $5,000 threshold, the same sequence of private placement followed by Reg A, and the same audience sentiment as the subscription pool. The difference is that Newsmax sells high-stickiness cable news traffic, while the Los Angeles Times still derives over half of its revenue from print in 2024, with digital advertising smaller than print advertising. The industry position is characterized as "transformational financing with control retained," not expansionary mergers, nor a completed transfer of pricing power to digital.
Structurally, this is capital concentration: loss-making media is packaged into the controlling shareholder's studio portfolio, with external funds placed in preferred shares below common stock, while voting rights remain with the original shareholders. The mechanism is that traditional newspapers' free cash flow is insufficient to fund transformation, and the public market is unwilling to price according to private placement narratives, so liquidity commitments are first pre-sold to qualified investors with coupons and discounts; if the listing fails or is delayed, the 7% dividend becomes a continuous cash outflow, and the discount terms cannot be fulfilled, leading capital concentration to shift from "growing the platform" to "using new money to sustain old losses."
ABAB News · Cognitive Law
First sell liquidity commitments, then sell profits that have yet to materialize
Control is not sold; what is sold is the discount and coupon
Packaging loss-making assets into a story platform is easier to price than listing separately