Mad Money

Cramer Welcomes Possibility of News Corp Split

“Mad Money” host Jim Cramer welcomed news that News Corp is considering splitting its publishing assets, including the Wall Street Journal, from its entertainment properties, among them its Fox News and entertainment programming.

Jim Cramer

“I think the News Corp break up is terrific news,” Cramer said. “I feel that breaking up is easy to do when you have two different divisions of two various growth rates under one roof.”

After all, Cramer said growth-orientated money managers don’t like owning shares of companies where a rapidly expanding business is held back by a slower business. In Cramer’s opinion, News Corp’s fast-growing entertainment business is being bogged down by its struggling print media business.

Nomura, a brokerage firm, reported that News Corp’s entertainment assets are red hot. News Corp’s TV, film, satellite and cable divisions are growing at a 13, 8, 7 and 15 percent clip respectively, the firm reported. Its newspaper business, on the other hand, is decreasing by 24 percent while magazines are declining at a rate of 19 percent, Nomura said. To Cramer, it appears as though the little newspaper and book division has been “crushing the value out of News Corp.”

It seems Cramer wasn’t the only one who thought the split is a “brilliant idea. “ The stock skyrocketed to a four-year high Tuesday. Cramer thinks it isn’t done going up either. He suspects it could possibly shoot up to $25, if not $28 a share.

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— contributed to this report

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