Rupert Murdoch pimps the news (Photo credit: DonkeyHotey)
Well it’s all over. News Corp (Nasdaq:NWSA) had its annual meeting and nothing really changes. Rupert Murdoch insisted shareholders did not want to change executive pay scheme, dual share structure.
That’s because he voted his shares and held the day. Other shareholders voted against but could not overcome the natural advantages that Rupert Murdoch has built for himself.
So investors you have a few choices. Suck it up and hope Murdoch is smart and drives shareholder wealth. Just like investing in a fund of some sort.
You can become disgusted and sell out and just ignore the stock. Which might be the easiest option.
Or you can fight like hell. Spend huge legal bills without near term prospects of profits. This quite frankly is the best long-term gambit. Rupert Murdoch will not stay in the saddle for ever. The recent wire-tap scandals were major stress events. His sons are not considered media geniuses. They certainly do not have the Machiavellian flare that Murdoch is known for.
The battle will be joined when the funeral is announced.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti
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
Image via CrunchBase
News Corp (Nasdaq:NWS) announced two brand new directors who will be voted in next annual meeting Oct 16, 2012 in Los Angeles. Considering the governance difficulties facing News Corp you have to wonder about the two-way motivation for the two newbies. Alvaro Uribe is the former president of Columbia and a bog supporter of america’s war on drugs. Much of this war was fought in Columbia with American money and resources. The justification for Alvaro Uribe is his international credentials in particular insights into Latin America.
The other nominee is a former Labour Secretary from 2001 to 2009, Elaine L. Chao. News Corp says it likes her experience in leading vast complex organizations. and you know what she does have experience leading large complex organizations.
No news yet on compensation structure but I’m sure it’s not minimum wage.
What News Corp is hiring/acquiring is political cover and savvy. Rupert Murdoch long the master manipulator for right-wing causes has managed to get himself into a lot of trouble with the illegal wire tapping cell phone abuse scandals. What does he need?
Political cover, contacts and savvy. Expertise is waging war against drug cartels not so much.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter @financialskepti
English: Re-creation of current logo of Sky News (2008 – current). (Photo credit: Wikipedia)
News Corp (Nasdaq:NWS) announced that it is possibly seeking a way to break itself in two. The announcement came only after the Wall St Journal which is owned by New Corp broke the story and started beating the jungle drums very hard. Not sure what News Corp thought they would achieve by not making the announcement themselves.
A couple if issues with that of course. The whole wire tapping governance issue with police investigations and some arrests is still very much around. Buying or selling other assets will not make it go away. It will probably just complicate the transaction as investigators politically motivated or just curious will keep asking everyone to open up their kimono on more than one occasion.
The whole BSkyB may benefit according to many commentators. At this point it is so politically charged, the BSkyB transaction is not likely to break Murdoch’s’ way. Doesn’t matter what other assets are sold off.
The whole move reminds me of a wolf whose paw is stuck in a steel trap. desperate and not able to conjure up a better strategy it starts to gnaw away at its paw in order to extricate itself from the problem at hand. except in this case the wolf is making an announcement that it plans to gnaw off its paw before it has actually done so. Probably with the secret hope of not really having to do so.
It’s all just a bit too surrealistic and Machiavellian. Simple valuation metrics will not work in this context.
George Gutowski writes from a caveat emptor perspective.
Conrad Black has tried to kick Rupert Murdoch News Corp (Nasdaq:NWS) in the balls in the upcoming Vanity Fair edition. That’s the one with Angelina Jolie on the cover. Newsstands in NYC and LA Sep 1, iPad Sep 6. Conrad Black who is on his way back to jail complains about Rupert Murdoch’s bitch slaps that he has had to suffer. This from a man about to go back to finish up his sentence. Rupert Murdoch is spending a lot of time wondering how he can stay out of jail. The two guys supposedly have similar philosophies but would probably gladly have their butlers choke each other to death.
Conrad Black ever controversial wonders if he can survive on about $80 million. A few more years and then he will come out. I predict Barbara Amiel will have a cotillion like ball as Conrad Black thumbs his nose and does what ever he wants only restricted by his $80 million. Will it be one of those marvellous Vanity Fair parties. Rupert your invited of course hope you can make it.
Disclosure: George Gutowski writes from a caveat emptor perspective. I usually don’t give a rats ass what happens to these two guy’s on a personal level. There are just fascinating reads.I do not have positions in any stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
Image via Wikipedia
Rupert Murdoch head honcho over at News Corporation (Nasdaq:NWSA) is around 80 and is probably in the deepest trouble he has ever seen. Say what you want about the old guy he is probably highly disappointed in the turn of events. Look at other senior executives or world leaders who come under great stress. Heart Attacks and other ailments befall even the most powerful [insert good comment about Karma here]. Hosni Mubarak the former Egyptian leader is supposedly in a coma.
Not that anyone is wishing Rupert Murdoch ill. But the odds are he will have debilitating health problems which will eventually remove him from power and perhaps the ability to function. This means two things.
- Investigators need to get to him now while his health is still adequate and before he can apply further coats of teflon.
- The board of directors will be left holding the bag. Directors and Officers liability insurance claims will be enormous.
Just read Andrew Ross Sorkin in the New York Times Dealbook and ponder the composition of the board. He even includes this quote
“This is a board that qualifies for an ‘F’ in every category,” Nell Minow, a member of the board of GovernanceMetrics International and founder of the Corporate Library, a governance firm, said without any hesitation. “It is the ultimate crony board.”
Rupert Murdoch cannot even pull a Bernie Madoff and say he was the only one.
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
Image by DonkeyHotey via Flickr
While Rupert Murdoch (Nasdaq:NWSA) is ignoring politicians and trying not to appear at his own witch hunt the News Corp IT staff are probably numb with fear. The hacking community is very self righteous. Hack attacks and all other forms of security intrusions into every aspect of the Murdoch media empire have to be gaining momentum.
Live by the sword die by the sword.
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours. I also have no connection to the hacking community.