BOSTON (TheStreet) -- In a stunning turnabout, Rupert Murdoch's News Corp. (NWS) dropped its bid for U.K. satellite broadcaster British Sky Broadcasting (BSYBY) amid an evolving phone-hacking scandal that has turned into a national political issue.
Coming from the publisher of The Wall Street Journal, this turns the stock prospects for News Corp. and BSkyB on their heads.
|Rupert Murdoch's News Corp Shares are Battered In Scandal|
News Corp. said today it is dropping its bid to acquire the 60% of BSkyB that it doesn't already own. The TV network, already 40% owned by News Corp., is seen as a revenue-grower for an organization that is print-heavy with media.
If you are investing in these companies, and thinking of adding to your position, perhaps you should hold off and wait and see what happens in the rapidly evolving political situation in the U.K. as Australian media baron Murdoch faces the challenge of his fabled business career.In a press release issued Wednesday, Chase Carey, News Corp.'s president and chief operating officer, said "we believed that the proposed acquisition of BSkyB by News Corp. would benefit both companies but it has become clear that it is too difficult to progress in this climate. "News Corp. remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it," he said. News Corp. had tried to stanch the scandal and its influence on its shareholders with some procedural moves in the U.K. and a major stock buyback on Monday, but apparently they haven't worked. BSkyB is the only satellite television operator and largest pay television provider in the U.K. News Corp. has said it is increasing its current share-buyback program to $5 billion from $1.8 billion, beginning in August. But shares of both classes of News Corp. stock have gotten thumped over the past week. The A shares are down 2% today and have lost 13% over the past week, while the B shares have lost about 1% today and 15% over the past week.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV