What made News Corp stock gain 10% on Wednesday?
Shares of New Corp (NASDAQ: NWS) are up nearly 10% on Wednesday after Rupert Murdoch scrapped plans of recombining the mass media company with Fox Corp (NASDAQ: FOX).
News Corp stock cheers the announcement
The media mogul had proposed the merger last fall in hopes that the joint company will have a stronger balance sheet to further grow via acquisitions.
But now, he no longer sees the combination as “optimal” for shareholders of the either company, per his letter to News Corp and Fox Corp today. According to News Corp CEO Robert Thomson, the development will not have an impact on employees.
In November, Independent Franchise Partners that has a sizable stake in both Fox Corp and News Corp had opposed the merger, arguing it will disable News Corp from unlocking its full value. Fox shares are also trading up this morning.
Why else is News Corp in headlines today?
News Corp is also currently in advanced talks to offload a massive stake it has in Move Inc to CoStar Group – a deal that could be worth over $3.0 billion. In a recent regulatory filing, News Corp said:
Any potential transaction would support News Corp’s strategy to optimise value of its digital real estate services segment, while strengthening Realtor.com’s (that Move Inc operates) competitive position in the market.
The stock market news arrives a week before News Corp is scheduled to report its Q2 results. Consensus is for it to earn 31 cents a share – down about 30% versus a year ago. Wall Street currently rates the News Corp stock at “overweight”.
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