Analyst: GateHouse Media stock could be worthless, liquidation possible

As GateHouse Media stock drops dangerously toward the $1 mark, financial analyst Tom Corbett told Editor & Publisher that the company's stock may be worthless:

"Because of the company's exposure to a challenging advertising environment, a debt-heavy balance sheet, and declining cash flows, we think the equity shares could be worthless," stock analyst Tom Corbett wrote.

Morningstar reduced its fair value estimate for GateHouse shares to zero from $3 in its report in May.

Morningstar also said GateHouse is close to violating one or more of the covenants on its huge deb. "Should that happen, its debt could become due immediately, resulting in a possible liquidation scenario," Corbett wrote.