The Five Dumbest Things on Wall Street This Week
1. News to the Bancrofts
Youth will be served at News Corp. (NWS).
Rupert Murdoch's media conglomerate made headlines this week by naming a new director. News Corp., which owns the Fox television network, tapped 27-year-old Natalie Bancroft to fill an opening tied to the pending acquisition of Wall Street Journal publisher Dow Jones (DJ).
The appointment raised eyebrows because Natalie Bancroft is neither a titan of industry nor a publishing industry veteran. She's an opera singer who lives in Europe.Moreover, she got the slot only after her family -- the Bancroft family that controls Dow Jones through its supervoting stock -- fumbled its chance to place a high-profile journalist on the board, by making ill-advised nominations and missing deadlines. Still, News Corp. CEO Rupert Murdoch insists he has the right candidate. As TheStreet.com's Nat Worden reported Wednesday, Murdoch bristles at questions about whether Natalie Bancroft has the wherewithal to look after shareholders' interests. "That's rubbish," Murdoch said on a conference call with analysts following the company's first-quarter earnings report. "The experts said Google's (GOOG) structure would be bad for shareholders." Way to change the subject. The experts' complaint wasn't that Google's board was packed with 27-year-old opera singers lacking in apparent business experience. To the contrary, Google's board is chock full of Silicon Valley hard hitters. The experts' complaint about Google -- and about Dow Jones and News Corp., for that matter -- is that the company has two classes of stock. The arrangement gives insiders control of the company with just a minority economic stake -- and insulates the CEO and his pals from shareholder discontent. Not that any of this matters much to Murdoch, who after all is due next month to take control of the Journal. His $5 billion bid for Dow Jones was helped immeasurably this past spring by persistent strife within the Bancroft family. Murdoch may have been recalling that as he took questions on Wednesday's call. "They're a funny family," he said of the Bancrofts. And as usual, the joke is on them. Dumb-o-Meter score: 93. "We think Natalie is going to be a wonderful addition to our board of directors and we look forward to working with her," said Murdoch.
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