News Corp Stock Off Lows as Hacking Scandal Unfolds
News Corp stock is slipping ever so slightly on low volume following the announcement that criminal charges have been brought against eight key figures in the never-ending phone hacking scandal, including ex-News of the World editor and former U.K. director of communications Andy Coulson and former head of News International Rebekah Brooks.
Also being charged are several senior tabloid reporters, along with private investigator Glenn Mulcaire. This is just the latest development — and a very significant one — in an interminable tale that goes all the way back to 2006, when the first arrests were made on suspicion that now-shuttered London tabloid News of the World was allowing its reporters to hack into the voice mails of royal family members.
Since then the investigation has widened enormously — it really caught fire amid gruesome allegations that the tabloid hacked into the voice mail of a missing British 13-year-old girl who was later found murdered — and lead to several more arrests, resignations and torpedoed reputations, including that of media mogul and News Corp chief Rupert Murdoch himself.
Just a few days ago, headlines hit that Murdoch was resigning as director of several News Corp. subsidiary boards in the U.K. and the U.S., a possible sign that the CEO is further distancing himself from the company's U.K. newspaper arm as the scandal continues to unfold. News International put out a statement indicating the resignations were simply related to News Corp.'s upcoming split, which will divide the company into two publicly traded companies, one focused on publishing and the other on its hugely profitable media and entertainment business.
This seems like a good time to revisit Yahoo! Finance's previous post on News Corp stock's "pie low," the price shares hit last summer when Rupert took a shaving cream pie to the face while testifying at a parliamentary hearing.
Since March 4, when Yahoo! Finance first reported on the stock's upward movement following the pie-in-the face incident on July 19, 2011, News has traded in a range of $18.72 to $22.95 (closing prices), still well above the "pie low" of $15.40. Investors would have lost out if they sold in early August of last year, when the price briefly dropped below this low (the 52-week trading range stands between $13.83 and $23.09, according to Yahoo! Finance data).
But investors who bought shares at the pie low and held them would be more than 34 percent ahead today. This indicates that the company's strength in the media world easily overshadows — at least for now — the scandalous headlines that may continue to plague it for many, many months to come.