The phone hacking scandal that has rocked Rupert Murdoch’s News Corp. and led to the closure of its News of the World has not gone unnoticed on Wall Street.
On Monday, News Corp. stock dropped by over seven percent, ending up at $16.10 when the market closed. That's just about $3—and more than 15 percent—off the company’s 52 week high of $19.08.
The event that likely had the greatest impact on News Corp. investors Monday was the company’s announcement that it was withdrawing concessions it had made to the British government in order to win approval for the pending deal to buy the 61 percent of satellite broadcasting company British Sky Broadcasting it does not currently own. Relatedly, the British government announced that the BSkyB deal would be referred to the U.K. Competition Commission.
James Dix, a media analyst with Wedbush, estimates that the completion of the BSkyB deal could raise News Corp.’s stock value by $1 per share, but also said, “there’s a rising uncertainty beyond BSKyB.” Dix added, “In the near term, stocks trade on the next material news item. At this point, it’s hard to see what the next positive news item might be [for News Corp.]”
