Washington Post makes paper profit for Warren Buffett Shares in the Washington Post Company jumped to a five-year high, sending the value of Warren Buffett's stake to over $1bn, as investors welcomed the $250m sale of its flagship newspaper to Jeff Bezos, the Amazon founder. The valuation, equivalent to 17 times the publishing business's adjusted earnings before interest, tax, depreciation and amortisation for 2012, outstripped Standard & Poor's estimate before the deal that the division was worth only $50m-$85m. By the close in New York, shares in the Post's parent company were up 4.27 per cent at $593, their highest level since the financial crisis of 2008 and up 62.5 per cent since the start of 2013. That valued the 27.9 per cent stake held by Mr Buffett's Berkshire Hathaway group at just over $1bn and the 0.84 per cent holding of fourth-generation publisher Katharine Weymouth at $31m. "It is a thunderbolt," said Ken Doctor, a news industry analyst with Outsell, who cautioned that the sale price the Graham family secured may have little bearing on other metropolitan newspapers" valuations. Shares in the New York Times Company rose only 0.9 per cent, while other US newspaper publishers" shares fell. Mr Bezos, who is buying the Post in a personal capacity, is taking on a business whose revenues fell 7 per cent to $582m last year and which reported operating losses of $53.7m, including non-cash pension expenses. Its financial significance had become "largely marginalised," S&P analysts said, noting that it contributed only 14 per cent of group revenues. The group, advised by Allen & Company, will keep its volatile Kaplan education division, its Cable One rural cable operator and its six Post Newsweek local television stations from Detroit to Miami. Unlike many recent newspaper buyers, Mr Bezos is not buying the newspaper's valuable head office building. In contrast to John Henry, who bought the Boston Globe from the New York Times for $70m this weekend but declined to take on its $110m pension liabilities, Mr Bezos will also take on the Post's pension plan. Accounting conventions have required the Washington Post Company to record non-cash pension charges, but it has not had to put a penny into its pension plans since Mr Buffett advised it to change pension adviser in the late 1970s. The group's pension plans show a $600m surplus, unheard of in an industry where declining headcounts in newsrooms and printing plants have strained retirement plans. After sealing the deal he agreed in principle at the Sun Valley media and technology conference in July, Mr Bezos has yet to visit the Post's newsroom and has given few indications of his plans in print or online. The Post's weekday print circulation fell 16 per cent from 557,000 to 480,000 between 2010 and 2012, even as monthly average unique visitors to washingtonpost.com rose from 28.2m to 41.2m. Print advertising fell 14 per cent to $228m last year as revenue from online publishing increased 5 per cent to $111m. More than 90 per cent of its print circulation is within 50 miles of Washington, whereas about 84 per cent of its online traffic comes from outside that area.