Rupert Murdoch Bleeding Cash To Save Plummeting News Corp Stock
MPs have invited the beleaguered News Corp owner Rupert Murdoch in for a one-off chat before a committee next week to discuss the phone hacking scandal. They’re not sure if he will grace them with his presence. Murdoch is rather preoccupied by News Corp plummeting yesterday as investors fled the struggling stock, fearing the BSkyB deal was dead in the water.
The House of Commons clearly does not think a Murdoch takeover of Sky is in the public interest and is asking for Murdoch to withdraw his bid until the criminal investigations are complete. Credit Suisse giving the deal a ten percent chance in light of the snow-balling corruption charges surrounding NOTW and now NC. Things are so touchy that Murdoch bought back 5 billion dollars of News Corp stock in an attempt to soothe jittery investors.
The Guardian explains:
News Corp has announced plans to buy back $5bn (£3.2bn) of its shares in an attempt to halt the slide in value of Rupert Murdoch’s media empire.
The growing phone hacking scandal has sent News Corp’s shares down 13% since the story first broke. The share price collapse had wiped more than $5bn off the market value of News Corp. The drop was most painfully felt by the Murdoch family, which with a 39.7% shareholding, saw its paper fortune reduced by more than $2bn.
News Corp shares opened up 3% in New York at $16.57 after the buyback, which trebled News Corp’s earlier commitment to buy $1.8bn worth of shares, was announced.
The buyback comes the day after News Corp triggered a delay to its plan to buy the 61% of BSkyB it does not already own. The proposed takeover of Sky will be significantly delayed by a Competition Commission investigation into the proposed deal.
Late last night, Scotland Yard’s reason for bungling the initial investigations into the phone hacking scandal and corruption was exposed by the New York Times as it was revealed that several of the lead investigators were hacked and their personal details leaked to other press outlets, causing one to step down.
“Shortly after Scotland Yard began its initial criminal inquiry of phone hacking by The News of the World in 2006, five senior police investigators discovered that their own cellphone messages had been targeted by the tabloid and had most likely been listened to….’If it is true that police officers knew their phones had been hacked, it is a serious matter that requires immediate investigation,’ said John Whittingdale, the chairman of the Culture, Media and Sport Select Committee, which investigated phone hacking. ‘It would be shocking.'”
In 2009, Metropolitan Police Assistant Commissioner John Yates ruled that there was no need to reopen the phone-hacking investigation and today he admits that he is 99% sure his phone was hacked between 2005-2006. This is exactly the sort of corruption that should cause Americans to question whether the DoJ or Congress will call for an investigation News Corp and if not, why.
Just this morning, we learned that the Wall Street Journal has been implicated in the growing scandal. Les Hinton, publisher of the Wall Street Journal, also oversaw News of the World during the time of wide spread phone hacking. Media Matters wrote, “Worse, Hinton oversaw an internal investigation into the matter that James Murdoch now acknowledges ‘wrongly maintained that these issues were confined to one reporter.’”
That makes the Murdoch scandal an American problem, as if we didn’t already know that after the allegations of hacking 9/11 victims’ phones were revealed late Sunday night. That revelation triggered a response from CREW, who called for the House and Senate to investigate whether journalists working for News International (owned by News Corp) hacked into Americans’ phones.
Only 170 out of the 4,000 known victims of phone hacking have been contacted thus far.
Murdoch has already had to spend billions in order to prop up tumbling News Corp stock, but financial experts say he has enough cash on hand to go through with his BSkyB takeover plan. It’s too early in the game to see if the Facebook and Twitter boycott campaign planned against News Corp and News International will have any impact on the share prices, but if it is as effective as the boycott on Glenn Beck’s advertisers, it will most certainly send a message that could well further depress share values. With the delay of the Sky Broadcasting takeover, there is still time for a boycott to have an impact on News Corp’s financial health.
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