Starboard building a stake in News Corp ‘doesn’t make much sense’

October 16, 2023 09:09 AM PDT | By Invezz

Starboard building a stake in News Corp ‘doesn’t make much sense’ — Image source: Invezz

Semafor editor-in-chief reacts to the news

Anonymous sources told the Wall Street Journal today that Starboard plans on pushing for strategic and governance changes at the Nasdaq-listed firm.

The activist investor also wants to seek an end to its dual-class share structure that leaves an outsized voting power with the Murdoch family, they added.

On CNBC’s “Squawk Box”, Ben Smith – the cofounder and editor-in-chief of Semafor agreed that there has been criticism on governance and operations of News Corp. Still, he said the Starboard move “doesn’t make that much sense” considering the Murdochs control the company.

Last month, Rupert Murdoch stepped down as Chairman of News Corp as Invezz reported here.

What I hope people will start to realise when we release the final results of the Murdoch Referendum Accountability Project is that News Corp was not only biased towards the ‘no’ campaign (approx 70% ‘no’ arguments) but its commentators WERE the ‘no’ campaign. Let that sink in.
— Victoria Fielding (@DrVicFielding) October 15, 2023

What else is Starboard pushing for at News Corp?

Other changes that Starboard is reportedly seeking at News Corp that it sees as “undervalued” include spinning off its online real-estate unit, as per the WSJ.

According to Ben Smith of Semafor, the “most logical answer” is that the activist investor is convinced spinning out the real-estate piece will deliver a higher multiple.

He also said that Lachlan Murdoch – the new Chief Executive of News Corp may choose to take “dramatic steps like these to impress the markets”.

News Corp is expected to report its quarterly earnings in mid-November. Consensus is for it to earn 13 cents a share versus 12 cents per share a year ago. The media stock is currently down 25% versus its all-time high.

Watch here: https://www.youtube.com/embed/siqQ_VEO6mg?feature=oembed

The post Starboard building a stake in News Corp ‘doesn’t make much sense’ appeared first on Invezz.

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