Whitney Tilson: NewsCorp Is Not Having a BP Moment

Media investors are trying to figure out what to do with News Corp as new developments in the hacking scandal surface almost every day.

On Sunday, Rebekah Brooks, who resigned from News Corp.'s U.K. media arm Friday, was briefly arrested as part of a widening police investigation of phone hacking and alleged bribery of police officers. She was released on bail following nine hours of questioning. Her lawyer, Stephen Parkinson, said she is innocent.

The widening phone hacking scandal also led to the resignation of Wall Street Journal publisher Les Hinton, who was installed as the head of Dow Jones when News Corp. bought it in late 2007. As it broadens, the scandal threatens to open up Murdoch and News Corp. to legal scrutiny and more public outrage

Considering all the bad news, some investors are starting to wonder if News Corp is having a kind of BP moment. (In other words they're wondering if the stock is oversold as BP was oversold in the early days of the Gulf of Mexico crisis.)

Although top hedge fund manager Whitney Tilsonwas a buyer of BP after the Gulf spill he’s not tempted -- in the least -- to buy News Corp.

”When we bought BP it fell more than 50% from its peak before the crisis," says Tilson in a live interview on Fast Money. "However NewsCorp is only down 17%. It’s not even close to being cheap enough,” he says.

In fact, Tilson tells us he thinks News Corp is probably a better short than long.

“And you know there are going to be a lot of negative headlines in the near-term that could pressure the stock. You have to believe something significantly positive is going to happen and I’m scratching my head trying to come up with it.”

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CNBC.com with wires.