News Corp. stock up as Murdochs questioned in UK
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News Corp.'s stock rose on Tuesday as CEO Rupert Murdoch and his son, James, were questioned by a British parliamentary committee about phone hacking at the now-closed News of the World tabloid.
The stock regained some of its value after falling in recent weeks because of the scandal. The stock increased 97 cents, or 6.5 per cent, to USD 15.94 in afternoon trading on Tuesday.
Even so, the stock has fallen nearly 11 percent since the end of June, compared with a decline of less than 0.5 percent for the S&P 500 index in the same period. Today, Rupert Murdoch called the questioning the "the most humble day of my career," but he refused to take personal blame for the crisis, which has threatened to engulf his media empire.
He said he was shocked and ashamed at the hacking of the phone of a murdered girl by staff at the News of the World. As the crisis has spread, two top News Corp. executives have resigned, including Wall Street Journal publisher Les Hinton, who has worked with Murdoch for more than half a century.
Citi Investment Research analyst Jason B. Bazinet said News Corp. is facing increasing risks of the investigation "leaping the pond" to the U.S. He also says the company's stock has been falling because of the recent executive departures and the company's decision to drop its bid to buy the rest of British Sky Broadcasting it doesn't already own.
Investors, Bazinet said, have two main fears: News Corp. could be forced to sell its US TV station business, or it may have to sell its current 39 per cent stake in BSkyB. "We think both scenarios are very unlikely," he said.
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