News Corp gets tepid response from investors after split

News Corp shares slipped when the company began trading separately from the 21st Century Fox entertainment operation, as investors gave a tepid reception to the slower-growing publishing business.

The new News Corp, which includes publishing assets, such as The Wall Street Journal and HarperCollins, and an education division, gave up its earlier gains on Monday, and its shares fell 2 per cent to US$14.95. It has a market value of about US$9 billion.

That compares with British education publisher Pearson , whose market value is US$14.6 billion, and newspaper and broadcast company Gannett Co at US$5.5 billion.

“News Corp is largely seen as ink on paper, and the perception is that the good assets, so to speak, went to Fox,” said Gabelli & Co analyst Barry Lucas.

Shares of 21st Century Fox, which includes the Fox cable network and the 20th Century Fox movie studio, were up 2.1 per cent at US$29.37 on Monday, giving the company a market value of about US$68 billion.

Evercore Partners analyst Alan Gould called the new Fox company one of the fastest-growing entertainment conglomerates. In a note to investors on Monday, he gave the stock an “overweight” rating and a US$34 price target.

Rupert Murdoch, who controls and is chairman of both companies, last summer announced his plans to split his empire, bowing to some large shareholders who had long called for News Corp to shed its slower-growth newspaper assets.