During the four weeks preceding February 20, New York Times Company stock had been staging a nice comeback.

Lord only knows that the company's long-suffering shareholders, who before then had seen the share price drop more than 70% since June 2002, a point in time that roughly coincides with the onset of the Old Gray Lady's seemingly intractable case of Bush Derangement Syndrome, welcomed any kind of reversal of fortune.

For a while, they had it. From a intra-day low of $14.01 on January 23, the stock rose over 50%, closing at $21.07 last Wednesday.

But on Thursday and Friday, that climb was halted abruptly, and partially reversed. While the Dow Jones Industrial Average lost 0.4% in those two days, and the S&P 500 dipped 0.5%, NYT stock dove almost 9.7%, closing Friday at $19.03.

In reviewing news about the company, I could only find two factors which could be likely contributors. The great debate, of course, will be the relative importance of each.

The first is that investors reacted negatively to the company's Thursday announcement after the closing bell that its 23¢ per share quarterly dividend would remain unchanged. Though the decision theoretically only affected Friday's trading, it's not unusual for such news to leak out earlier (I know, leaks at the Times. Imagine that).

The companys' dividend announcement followed a 31% increase in the dividend in March of last year that was partially pitched as a "return of capital" to shareholders resulting from sales of certain broadcast properties. Pegging shareholder reaction to dividend news is difficult at best, but despite the smiley faces at Times headquarters (the company's January 31 earnings conference call transcript is here), it's easy to believe that shareholders might have wished that the company would have reduced the dividend in the name of retaining more cash for operations (Agreeing and dissenting opinions as to the effect of the dividend announcement from corporate dividend-policy folks are more than welcome).

The second factor is the profoundly negative reaction to the Times's tissue-thin story Thursday (first available online late Wednesday) about John McCain's "relationship" with a female lobbyist in the late 1990s, and the likelihood that it weakened investors' perceptions of the company's journalistic integrity and credibility.

The Times was, and continues to be, strongly criticized not only by the story's target and the "usual conservative suspects," but by many in the ordinarily tight-knit Old Media community.

It has gotten to the point where the McCain story isn't the story any more; the Times's conduct is. Just a few Old Media examples:

• CNN.com -- "Times criticized, defended over McCain story"
• NPR -- "Newspaper Faces Questions About McCain Story"
• The editor of the Seattle Post-Intelligencer refused to run the Times's McCain story (HT Michelle Malkin), saying that "To me, the story had serious flaws. It did not convincingly make the case that McCain either had an affair with a lobbyist, or was improperly influenced by her."

Because the issue has become the Times itself, including the legitimacy of its decisions concerning whether to run the story and when, it's not unlikely that investors and analysts caught wind of the flap, and got nervous.

If newly-minted investor squeamishness over journalistic standards at the Old Gray Lady has indeed arisen, what, if anything, does the Times intend to do about it? Or is keeping the bias in its reporting so important that family-controlled management wouldn't particularly care if non-family shareholders lose faith?

Cross-posted at BizzyBlog.com.

—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters