Investing with Murdoch: Pearson in the crosshairs?
By Ian Cooper
Just to give you a head’s up and a sneak peak, my latest Stock Breakthroughs video report with Erin Beale takes a look at the Murdoch bid for Dow Jones, and who may stand to benefit should Murdoch just walk away. The video will be e-mailed and posted to TaipanFinancialNews.com by next Monday, May 28, 2007.
It’s not a surprise that I’m shocked by the actions of retail investors that believe the $5 billion bid for Dow Jones will go through. I’ve said so repeatedly right here in American Capitalist. And I’ll say it again. It’s not going to happen. The smart move is to short or buy puts on Dow Jones considering that the DJ stock could easily fall below the pre-offer price of under $40.
As voting stands now, 52% of the Bancroft voting shares are opposed to the deal. Even the Ottaway family, whichs owns some 6.2% of the voting shares are expressing disapproval for Murdoch’s bid. However, with Dow Jones most likely out of the picture, we wouldn’t be surprised to see a new Murdoch bid for another financial news company as News Corporation gears up to launch a CNBC-competing business channel this year.
Who then, do you buy if Murdoch’s pulls the bid? The competition… Rumor, as reported by blogs, is that he could go after Dow Jones’ rival, Pearson and the Financial Times, just to “stick it” to Dow Jones and its indecisions. And even if Murdoch doesn’t approach the Financial Times, Pearson stands a strong company that could attract future bids. Pearson currently trades under $18.
Take Care,
Ian L. Cooper
Editor, Early Alert Trader