news corp pitch
TRANSCRIPT
8/7/2019 News Corp Pitch
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NickBucheleres
January3,2011NewsCorp.(NWSA)
Currentlytradingat$18.28http://www.marketwatch.com/investing/stock/NWS NewsCorpstockwasup4.31%today(Jan.3)offoftheannouncementofstrongquarterlyearnings
andtheirnewestproduct:theDaily.NewsCorp.’sRupertMurdochannouncedthemediagiant’snewestproductonFebruary2nd:theDaily.AccordingtoMurdoch,theDailywillbethedominantdigitalnewssourceandwillcometodominatethetabletindustry.Theproductwillcost$40/year(99cents/week),comparedtootherleadingnewspapers,whichcostaround$100.TheWallStreetJournal,whichNewsCorp.alsoowns,costsover$100/year.TheDailywillinitiallybereleasedexclusivelyontheiPad.ItwassupposedtobeintroducedonJanuary19thinSanFrancisco,butthereleasewasdelayedduetotechnicalissues.http://www.bloomberg.com/news/2011-02-02/news-corp-unwraps-daily-digital-publication-for-apple-s-ipad.html
TheDailywasa$30millionsunkcostforNewsCorp,andwillcost$500,000/weektooperate.Theirmostrecentquarterlyearningswere$8.76billion;agrowthof$1.29billion.NewsCorp.’squarterlyreport:http://www.newscorp.com/investor/download/NWS_Q2_2011.pdf In2005,NewsCorp.purchasedMySpacefor$580million.TheyarereadytoliquidatetheirpositioninMySpace,afternothavingsuccesswithit.Thiswillfreeupcashforthemandallowthemtowhole-heartedlypursuetheDaily.Acrossthemediaindustryasawhole,gainshaveincreasedonrisingcableprices.NewsCorp.
gainshaveincreasedontheaforementionedrisingcableprices,inadditiontoprofitsfromtheirnews,film,andentertainmentdepartments.TheDailywillincreaseAppleiPadsalesandliftAAPLprices.iPadandtheDailyaredependantoneachotherandwillallowNewsCorp.(NWSA)stockpricetoriseintandemwithApple(AAPL)stock,andvise-versa.
ThisistheNewsCorp.chartfrom2005,whentheyacquiredMySpace.Theirstockpricerosefrom$16toits$25 peakin2007withthegainsfromMySpace.Shortlythereafter,NSWtumbledfrom$25to$6within2 yearsandhassincerecoveredtoitspre-MySpacepricesofabout$17.
8/7/2019 News Corp Pitch
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IbelievethatNewsCorpwillnotonlybreakthroughtheir2005levelsof$17,whereitiscurrentlytrading,butIbelievethatitwillalsoregain,andquitepossiblybreakthrough,its2007highsof$25.Thisisatangentialpitchoffofmytechnologybubblepitch,andthiswillresonatenicelyoffofourAppleposition,asthepricesofbothstocksarepositivelycorrelatedduetoonebeinganinputfortheother.MarketPerformance—TheJanuaryEffect
AlossorgaininJanuaryhasaccuratelypredictedFebruary-Decembermarketperformancewith72%accuracyinthepast61years:http://www.dailyfx.com/forex/fundamental/article/special_report/2011/02/02/January_Effect_f or_Euro_US_Dollar_and_SPX_Points_to_2011_Gains.htmlThisiscommonlyreferredtoas“theJanuaryEffect.”ThisJanuary,wewitnessedtheDow’sbestJanuarysince1997,leadbybluechips.ThistookplaceamidpoliticalunrestinEgyptandinflationfearsaroundtheworld.Quiteimpressive.Itisdifficulttodeterminewhetherthisiscoincidenceorcausality,butitisworthtakingintoaccount.WhenlayeredwithrisingUStreasuryyields,whichsignalan“exodusfromsafe-havenfixedincome”ascoinedbyPIMCOCEOMohammedEl-Arian,itpaintsquiteacompellingpicture:
Chartofthe3USindicescomparedtoUS10yeartreasuryyield.Yieldsstartedfallinginthesummerof2010,afteritwasconfirmedthatBernankeandtheFedwouldbuy$6000billionUStreasuries.OncethebuybacksstartedinNovember,though,yieldshavebeenrising,eveninthefaceofthemonthlybuybacks.Isthistrendsustainable?Itseemslikelythattheanswerisyes:Yieldsarelikelytocontinuetorise,whichwillemaciatebondprices.So,whyholdgovernmentpaper?Whynotheadintotherecentlyreboundedequities?Thatisthequestionthatmanyinvestorswillbeaskingthemselvesin2011,andgivenfallingvolatilityandrisingequitymomentum,IbelievethatUSequitieswillbethebeneficiaryofthistrend.
8/7/2019 News Corp Pitch
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