Activist investor Starboard Value has recently built a significant stake in Rupert Murdoch’s News Corp (NASDAQ:), according to information released on Sunday. The investor group believes that the media corporation is undervalued and is advocating for strategic transformations within the company.
Among the proposed changes are plans to spin off Move Inc., which is the parent firm of Realtor.com. Starboard Value also seeks to eliminate the dual-class share setup, which currently provides the Murdoch family with major voting control. The Murdochs’ 40% voting stake could potentially obstruct these changes.
News Corp is a media conglomerate that houses MarketWatch and Wall Street Journal, with Robert Thomson serving as CEO. The company’s Class A and Class B shares have seen a substantial increase in 2023, rising by approximately 15% and 18% respectively. This growth has surpassed that of the SPX index.
InvestingPro Tips suggest that News Corp showcases high earnings quality, with free cash flow exceeding net income. Additionally, the strong earnings should allow management to continue dividend payments.
Rupert Murdoch, the current chair of News Corp and Fox Corp, which saw a modest increase of 0.63%, is expected to step down from his position by the end of November. His oldest son, Lachlan Murdoch, is slated to take over his roles.
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