Media company's stock jumps on possibility it may spin off publishing business
Wall Street likes the idea of two separate News Corporations.
Shares in Rupert Murdoch's media empire closed up 8.28 percent to end the day at $21.96 and continued to climb in after-hours trading on news that the company is considering spinning off its publishing arm from its more lucrative television and film divisions.
Reports of a potential split hit earlier this week, but News Corp. legitimized the murmurs on Tuesday in a statement saying that it was "… considering a restructuring to separate its business into two distinct publicly traded companies."
It did not elaborate on how those companies would be comprised or when such a fissure might take place.
News Corp.'s publishing unit includes the New York Post and the Wall Street Journal and has long been seen as one of News Corp. Chairman Rupert Murdoch's great passions.
Yet keeping it joined to the television and film business may no longer make sense, analysts and some shareholders have argued.
A recent investigation into SEC filings by TheWrap revealed that News Corp.'s publishing arm was responsible for just 14.2 percent of the company's $4.85 billion in operating income last year. The bulk of its profits came from film and television companies it houses such as Fox News and Twentieth Century Fox.
Investors do not appear to mind a divorce.