Wall Street remains wary of News Corp.Ditching the BSkyB bid fails to abate worry that the scandal enveloping Rupert Murdoch's media conglomerate will continue to spread.By Meg James and Dawn C. Chmielewski, Los Angeles Times
July 14, 2011
<snip>
News Corp.'s decision to ditch its $12-billion bid for Britain's largest pay-television service was greeted with guarded optimism on Wall Street yet did little to ease nagging uncertainty about whether the widening phone hacking scandal will reveal other explosive details. Shares of Rupert Murdoch's media conglomerate — beaten down as much as 16% in the last two weeks — gained 4% on Wednesday to $15.93 as investors hoped that giving up its bid for all of British Sky Broadcasting would free up cash.
But Wall Street remained wary.
"If you are an investor, you don't know where the bottom of this thing is, and what other revelations are out there," said Doug Creutz of the investment bank Cowen & Co. "Until the British police's investigation is complete — and that will take months — there will be an overhang on News Corp. stock."
On Tuesday, News Corp. appeased investors by announcing it would buy back $5 billion worth of stock.
Analysts speculated that the phone hacking scandal might curb Murdoch's appetite for big acquisitions — at least in the short term. Investors long have complained that Murdoch squanders capital on pricey and nonessential purchases at inflated prices. Examples include buying social network Myspace, an education-related company and the Wall Street Journal. The scandal has opened the door for critics of Murdoch and his operations, including the politically influential right-leaning Fox News Channel.<snip>
More:
http://www.latimes.com/business/la-fi-ct-news-corp-20110714,0,5681017,full.story:shrug:
:kick:
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
