Murdoch Leaves the Outback Again

Once again, Rupert Murdoch reminds us that if you want to make money, there's no place like the U.S.

In a move that echoes Murdoch's own naturalization as a U.S. citizen nearly two decades ago, the Murdoch-led and Australia-based News Corporation (NWS) said Tuesday that it plans to reincorporate in the U.S. for a simple, pragmatic reason: more money.

News Corp. isn't moving onshore so that the company can enjoy the local tax laws, workforce, First Amendment or generally accepted accounting principles any more than it does already.

No, according to News Corp.'s Tuesday announcement, News Corp. is coming to America because that's where the money is. The move, the company said, will end up "increasing the scope and depth of the shareholder base, improving trading liquidity, enhancing access to the capital markets and making the company's shares eligible for inclusion in a variety of U.S.-based indices."

The move, says News Corp., will overcome many U.S. institutional investors' reluctance to hold foreign companies' stock and preferred stock, such as News Corp.'s preferred shares, which trade in the U.S. under the NWSA ticker. Under the proposed transaction, which must be approved by non-Murdoch shareholders, that preferred stock will be converted into nonvoting common stock.

News Corp. says it believes that the U.S. reincorporation will increase demand for its stock, thus narrowing the trading discount of the current nonvoting preferred shares to the NWS voting common stock and reducing the company's cost of capital.

On Tuesday afternoon, News Corp.'s American depositary shares -- each representing four shares of News Corp.'s hometown stock -- were trading at $37.45 for the common stock, up 1.6%, and at $34.85 for the preferred, up 6%.

Streets of Gold

For as long as the U.S. has been in existence, there's been a grand tradition of coming here for financial opportunity as opposed to for other reasons -- religious freedom, for example. America as a place where streets are paved with gold is plenty more alluring -- even if the gold is metaphorical -- than a destination whose streets are paved with asphalt.