News Corp. Stock Falls Amidst Phone Hacking Scandal

Shares down 5% Wednesday

Shares of News Corp., Rupert Murdoch’s media conglomerate, fell on Wednesday in the midst of the exploding News of the World phone hacking scandal.

News Corp. stock was down as much as 5 percent Wednesday afternoon, falling as low as $17.17 after closing at $18.54 on Tuesday.

At least one analyst thinks this may only be a blip on the radar unless government action follows. “There is headline risk involved, but as time goes on, historically speaking, investors tend to detach themselves,” said Tuna Amobi, an equity analyst with Standard & Poor’s. “The share price is reacting but will be forgotten unless there is major regulatory fallout."

The new turn in the phone hacking scandal occurred just as News Corp.’s bid to gain full control of BSkyB, a British satellite broadcasting company, approaches the final stages in the U.K. Provisional approval was given last Friday, but now Labour Leader Ed Miliband has called for the deal to be put before the Competition Commission, a public body that investigates mergers. Prime Minister David Cameron denied this request for review.