NWS - Why Fox Corporation Stock Plummeted on Monday
Blockbuster mergers between major companies can often get investors excited. But that certainly wasn't the case Monday with the potential tie-up of Fox Corporation (NASDAQ: FOX) (NASDAQ: FOXA) and its close corporate relative, News Corp (NASDAQ: NWS) . Although the latter's share price bumped up modestly on the scuttlebutt, market participants traded both classes of Fox's stock down at rates approaching 10%.
Following a report published after market hours Friday in The Wall Street Journal that company founder and chairman Rupert Murdoch was contemplating a merger between the two companies, Fox essentially confirmed this. It said its board of directors had formed a special committee to explore such a move. This was triggered by the receipt of letters from Murdoch and his affiliated organization, the Murdoch Family Trust.
The tersely worded Fox press release added only that the special committee is to "thoroughly evaluate" a potential merger of Fox and News Corp; the former is anchored by the TV properties of the Murdoch empire, while the latter is primarily its legacy print and online journalism business. Somewhat ironically, one of the latter's prize assets is The Wall Street Journal .
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Why Fox Corporation Stock Plummeted on Monday