As WC Fields said: "Never give a sucker an even break, never wise up a chump."
Newspaper stocks are up in sympathy with the News Corp (NWS) bid for Dow Jones (DJ). But, Murdoch & Company want the publisher of The Wall Street Journal for some specific reasons. The two most important are to pick up a stable-mate for Fox’s new business channel; the other is that Murdoch can pretty much buy what he wants, even if he overpays.
And, he will be overpaying for Dow Jones. The business publisher did a little over $100 million in operating profit last year. And, News Corp is offering $5 billion.
The New York Times (NYT) is up 8% on the news. The Journal Register (JRC), one of the worst run newspaper companies, is up 9%. Even Gannett (GCI) is up over 3%, although it is beginning to settle back as the market digests the news.
Dow Jones is a special situation. The value of the rest of the industry has not gone up by a dime.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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