Feedback
European Shorting
My Portfolios
Browse Gurus
Print
Email
The debate that is going on in my mind is whether Murdoch is overpaying for Dow Jones. The first thought that came to mind when I heard the offer on television was a) Murdoch is paying to high of a premium b) investment return on Dow Jones’s newspaper assets (Wall Street Journal and Barons) are sure to decline as time passes. At a 5 billion market cap Dow Jones trades 14 times earnings (ttm) and 33 times estimated 2008 earnings! Similarly, Google (GOOG) currently trades at 26 times estimated 2008 earnings. So what is wrong with the picture? Google’s earnings are growing at an expeditious pace while Dow Jone’s growth rate is “ho-hum.”
On the other hand, it is tough to put a value on the Wall Street Journal. I mean, it is the Wall Street Journal. The Wall Street Journal is the second most important newspaper only behind the New York Times (NYT) and without a doubt the most important financial news source in the world. In the meantime, I can only guess at what happens next while waiting for the outcome.
Disclaimer: I do not own any of the companies mentioned in this article
www.wslounge.com
Subscribe RSS
RSS
[biz.yahoo.com]
is this:
"Also, gaining control of Dow Jones would bolster Murdoch's plan to launch a financial cable news channel that would compete with CNBC, which is a unit of GE's NBC Universal subsidiary."
Murdoch's new financial cable channel will be tough competitiion for CNBC. Yes, CNBC does a great job today, but GE should overpay (yes, overpay for Dow Jones), thus knocking out any potential future competition for a long time.
I don't understand why GE should allow Murdoch come in and buy his way into "financial news" credibility. He will get that when he seals the deal.
Murdoch is smart, but his company hasn't been a good long-term investment because he overpays for things. However, he does continue to strengthen his business at the expense of shareholders, imo. Perhaps that's why GE walked away from the deal? I dunno.
- Vooch