Now, News Corp. is fighting the bogeyman.
Unnamed but “powerful enemies” are swarming, and the perception led Needham & Co. to downgrade the stock from buy to hold, reports Forbes’ Jeff Bercovici.
“We expect the powerful enemies of conservative-leaning Fox News and WSJ to exhibit sharper elbows in an election year like 2012,” two analysts wrote in a report. “Near-term headline risk is acute, even if accusations prove erroneous after the elections are over.”
While the opinion sounds a bit spurious and vague, another reason cited for the downgrade holds more weight. The pair of authors “also note that News Corp.’s stock has never done well during periods of volatility, underperforming the S&P 500 substantially during market shocks in 2008, 2002, 2011 and 1998.”
Combine the current state of the stock market with the ongoing fallout from the News of the World phone-hacking scandal, and the downgrade makes sense.
The company’s stock price was slightly down Monday morning after posting strong gains in the morning along with the rest of the market.