News Corp shares rally after losses
Tuesday 19 July 2011
News Corporation shares rallied today amid reports it may bring forward plans to split Rupert Murdoch's chairman and chief executive role in the wake of the phone hacking scandal.
It is understood that some News Corp board members want to promote chief operating officer Chase Carey to the chief executive role to succeed Mr Murdoch, leaving the 80-year-old as chairman.
Their decision may depend on how Mr Murdoch's performance in front of the Culture, Media and Sport Treasury Select Committee is received by the public and analysts.
Analysts questioned though whether any changes would be possible without the agreement of the Murdoch family as it has effective control of the company's voting shares.
Chase Carey is also seen as a staunch ally of Rupert Murdoch.
Shares in News Corp have fallen by 17% since the phone hacking scandal erupted two weeks ago, though they clawed back some of the losses today, rising by some 5%.
They were also boosted after ratings agency Moody's gave said the phone hacking scandal would not affect its debt rating.
Moody's stance help reassure investors after rival ratings agency Standard & Poor's (S&P) had placed News Corp on negative rating watch because of the possible fall-out from the scandal.
S&P said News Corp faced increased reputational, management and litigation risks because of what had happened.
Moody's, by contrast, took a much more sanguine view.
Its report said it did not expect the debt rating and stable outlook to be affected and highlighted the group's diversity.
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