While News Corp.’s decision to split itself into two separate companies within the next 12 months would force some investors to sell their shares in the company, many see this announcement as a plus for the stock’s value, said David Joyce, a senior media analyst at Miller + Tabek.
“We have a ‘buy’ rating on $25 on News Corp. ,” Joyce told CNBC’s “Squawk Box,” referring to his price target on the combined valuation of the two new companies.
Joyce said Rupert Murdoch’s decision to maintain his position as chairman in both the publishing and entertainment divisions, but to remain CEO of only the latter company, caught him off guard.
“The question as to the management of the publishing side is yet to be determined, but it’s known that he’s always been fond of the newspaper and assets, and for him not to have a direct role is a little bit of a surprise,” he said.
The split would separate the high margin cable and entertainment unit from the low margin publishing business, which may struggle depending on the decisions of management, he said.Page 1 of 2 | Next Page