News Corp: Shares rise after hearing

20th July 2011

News Corp shares closed up 5.5% in New York and rose 5.1% in Sydney. News Corp shares leapt amid reports it is considering replacing Rupert Murdoch as chief executive of the company, although Mr Murdoch insisted on Tuesday he was the 'best person to clean this up', adds the Daily Telegraph.

The move recovers some of the losses sustained as the phone-hacking scandal at its newspaper title, the News of the World  unfolded, adds the BBC report.

Following a sinking share price, a Daily Telegraph blog said: "News Corp shares keep falling. Financial markets often mis-price risk and the probability of certain outcomes, but a share price remains the cleanest collective verdict on a public company's management and prospects.

"Shares in News Corp, which are listed in New York, have dropped about 15% since the Guardian first reported that murdered school girl Milly Dowler's voicemail had been hacked…ratings agency S&P weighed in and threatened to cut News Corp's rating."

Despite an uplift in the share price, pressure on the company has continued, with more shareholders questioning the company's standards.

The giant Californian public pension fund, Calpers, is one of those who are unhappy with the way the company has been managed, said the BBC.

Calpers, which owns 6.4m of News Corp's shares, is unhappy with the shareholding structure that gives the Murdoch family's 'B' shares voting rights, meaning that although they own only 12% of the company, they hold the biggest single block – 40% – of the votes. Other 'B' shares are largely held by unnamed investors.

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