Home » Behavioural Investing » News Corp Drafts Regulators $NWS More horses for the kings men. #short

News Corp Drafts Regulators $NWS More horses for the kings men. #short

English: Rupert Murdoch at the Vanity Fair par...

English: Rupert Murdoch at the Vanity Fair party celebrating the 10th anniversary of the Tribeca Film Festival. (Photo credit: Wikipedia)

News Corp (Nasdaq:NWS) is hiring regulators by the bushel. In a classic close the barn door after the horse bolted new chief compliance officer Gerson Zweifach will announce the hiring of people including John McCoy, the associate regional director of the SEC’s enforcement arm in Los Angeles, and Brian Michael, a former federal prosecutor for the US Attorney’s Office in New York.

This is why you do public service; so that some rich guy who gets into a lot of trouble needs to hire you to run interference for him while he drives his get-a-way car to his next deal.

In the meantime the financial wheeling and dealing continues. Assets are bought and sold. It becomes more and more difficult to understand News Corp as more items are discontinued. This can become quite the smoke screen for the majority vote controller who is seen as a master manipulator.

The investment narrative has become dense. The question why invest in this company becomes more un-answerable. The only ones who will earn the big bucks are the hired guns in regulatory and compliance. Shareholders will not maximize wealth.

The trailing twelve month average for restructuring costs was 10% of total operating expenses around $3 Billion. The industry average is 2%. Just what is a restructuring expense. It can be anything your heart desires or the CFO needs.

Throw in a pension discount rate of 5.7% vs an industry average of 5.35% and you have a shiny castle on the hill of great expectations without proper footings. This always goes wrong. Always. It’s just a matter of time.

Short sales 6.8 million, about 1.6% or float and decreasing. Money flow around 1.34 as market is starting to dismiss old worries because they buy into the new window dressing.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti

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