Needham & Co. Downgrades News Corp. Stock, Citing “Powerful Personal Enemies”

Apparently, when your company is being accused of a mass conspiracy involving phone hacking and a widespread cover-up of said phone hacking, it doesn’t exactly translate to a viable stock option. Needham & Co. today downgraded News Corp. stock to a “hold” in the midst of new allegations of wrongdoing and continuing government investigations.

According to Reuters, Needham cited “[w]eakening markets, new government investigations, growing legal costs, and a witch hunt for the Murdochs” in deciding to downgrade the company’s stock. As of this posting, News Corp stock is trading at $15.52, down from a high of $18.13 in July, days before the phone hacking scandal became a worldwide story.

Needham analyst Laura Martin suggested that litigation costs have not been “adequately reflected in Wall Street models,” and gave one explanation for why investors would still be so bullish on News Corp.

“We believe Wall Street underestimates the resolve of powerful personal enemies of the Murdoch’s and political enemies of NWSA’s conservative media outlets.”

Martin also expected media rivals of Fox News and the Wall Street Journal to be more aggressive and “exhibit sharper elbows” in the upcoming election year.

h/t Reuters

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