Thanks to Rupert Murdoch's recent overture, Time Warner shares have traded more on drama than fundamentals. Now that he has dropped the approach for good, investors will need to face reality.
Shares of Time Warner plunged about 13 percent Wednesday after Murdoch's Twenty-First Century Fox withdrew its bid for the rival media conglomerate on Tuesday. Time Warner shares had surged a few weeks earlier after Murdoch made an $80 billion offer to the company.
Wednesday's decline gave back much of those gains. At the current price of about $75 a share, the stock remains a few dollars above levels before Murdoch appeared, suggesting some hope that he'll come back around.
Yet, it's probably time to set aside dreams of deals. On a conference call to discuss Fox's earnings Wednesday evening, Murdoch emphasized that he had made a "resolute decision" to walk away and Fox COO Chase Carey said the company is "done" with the pursuit of Time Warner.
Furthermore, there is "no discussion" among Murdoch and Fox executives of contemplating another bid, according to a person familiar with the matter. While Fox was willing to pay more than the original price it indicated, a chasm has remained between what Murdoch would pay and what Time Warner wanted, the person said. There has been no sign of any other suitors, either, the person added.
Spokespeople for Fox and Time Warner both declined to comment for this article.