Tag Archives: Markets coverage
T. Rowe Price wants Bancrofts to consider Murdoch offer
by Chris Roush
T. Rowe Price, the largest institutional investor in Dow Jones & Co. stock, wants the Bancroft family that controls the company to consider the $5 billion offer from News Corp. CEO Rupert Murdoch, according to a Reuters story. Dow Jones is the parent of The Wall Street Journal, Barron’s and Marketwatch.
Megan Davies wrote, “A spokesman for T. Rowe Price told Reuters the offer should be considered, but stressed the firm had not directly appealed to the Bancroft family, which controls 64.2 percent of voting shares.
“‘We’ve said all along that, as long-term investors in Dow Jones stock, we’re gratified that other investors have recognized the value that we always thought was there,’ the press officer said. ‘We think it is a reasonable offer to take under consideration.’
“The Financial Times earlier quoted Brian Rogers, the chairman and chief investment officer of T. Rowe Price saying the offer at $60 was a fairly attractive transaction price.
“‘I find it hard to believe the company itself has a plan to get the shares to $60,’ the Financial Times quoted Rogers saying.”
Read more here.
Trouble with CNBC stock picking contest
by Chris Roush
Jonathan Berr writes on the BloggingStocks.com web site that there’s been some trouble with CNBC’s stock-picking contest that is now leading to an internal investigation that threatens to taint the business news cable network’s promotion.
Berr wrote, “CNBC needs to figure out pretty quickly whether people pretending to be Wall Street wheeler dealers emulated their real-life counterparts and cheated to try and win a fantasy portfolio contest which has a $1 million first prize. Otherwise, the network may lose credibility with viewers and advertisers.
“The General Electric Co. cable channel is conducting an investigation into complaints from several wannabe Jim Cramers, Carl Icahns and Warren Buffetts that some of the 20 finalists in its CNBC Million Dollar Portfolio Challenge engaged in ‘unusual trading in violation of contest rules’ according to a statement on its web site. It wasn’t any more specific.
“For CNBC, this isn’t just a game.
“When the contest launched in March, CNBC.com saw a tremendous boost in traffic. Page views hit 67 million in April, making it the fifth-highest rated business news site beating more established media outlets including the Wall Street Journal and CNN/Money, according to comScore. On a page views per user basis, it ranks number one.”
Read more here.
Options market predicting Murdoch gets Dow Jones
by Chris Roush
Dana Cimilluca of The Wall Street Journal writes on its Deal Journal blog that the options market is betting that News Corp. CEO Rupert Murdoch may be successful in his bid to acquire Dow Jones & Co., the parent of the Journal.
Cimilluca wrote, “According to a research report from Citigroup analyst William Bird that was distributed today, the options market is pricing in a 65% probability that a buyout offer for Dow Jones is accepted. That, of course, follows the surprise $60-a-share offer for Dow Jones made last month and announced this month by News Corp. chief Rupert Murdoch. Citi, which doesn’t appear to have an investment-banking role on the possible deal, said it assumes the odds that News’s offer is raised to $65 and accepted is 65%.
“The prediction contrasts with that of at least one other analyst, Richard Greenfield of Pali Research, who this week said that after being rebuffed by the Bancroft family that controls Dow Jones, Murdoch may walk away. While Murdoch hasn’t ruled out an increase in his offer, he has said it represents ‘a full and more-than-fair price,’ leading some to believe no boost will be forthcoming.
“Bird, who like others puts little stock in the possibility that another bidder for Dow Jones will emerge, may not have known how right he was when he acknowledged in the report the difficulty of predicting ‘what’s in the hearts and minds’ of the Bancrofts.”
Read more here.
Longest market bull run in 80 years ignored by media
by Chris Roush
Tom Blumer writes on the NewsBusters web site that except for a story on CNNMoney.com, the financial press has ignored the longest bull run in 80 years for the stock market.
Blumer wrote, “The pervasive lack of coverage is stunning. Two Google News searches (on ‘since 1927‘ [not in quotes] and ‘80 years,’ [in quotes]) pulled up only one additional mention of the ‘bull run’ beyond the CNNMoney item cited in this post — and at that link, the writer characterizes the once-in-80-year event as ‘the best in over half a century.’ However, AHN’s Matthew Borghese did note that the S&P 500 is now ‘just points away’ (about 1.5%) from its all-time high.
“I also looked for coverage of the ‘bull run’ at the home page and business home page of the New York Times on the web. There was nothing on the Times home page beyond the normal ticker. The coverage of the stock market was the very last linked item on the Business section home page; the related underlying article made no mention of the ‘bull run.’
“Friday’s stock market news is on Page D4 of Saturday’s Washington Post print edition, with no ‘bull run’ mention.”
Read more here. Just wondering, but do you think the financial press is a bit gun shy with touting the market these days since it was criticized for doing too much touting during the late 1990s?
Critique of deal coverage overblown
by Chris Roush
TheDeal.com executive editor Yvette Kantrow writes that a recent critique of merger and acquisition coverage by The Audit used examples to make its point that were weak.
Kantrow wrote, “Indeed, The Audit’s evidence that ‘the business press loves the deal’ amounts to excerpts from three recent first-day stories in The Wall Street Journal, The New York Times and the Financial Times. Though rather anodyne to us, The Audit contends they use ‘overheated language.’ A WSJ piece on Barclays plc’s play for ABN Amro Holding NV, for example, credits the deal with ‘unleashing’ a ‘long-awaited’ wave of bank mergers in Europe that will ‘reshape the industry as the continent’s financial giants yield to the lure of size and global scale.’
“Feverish yet? Neither are we. Especially since the WSJ’s Heard on the Street column warned the next day that investors who have been bidding up European bank shares in anticipation of consolidation ‘would do well to be skeptical.’ So much for blindly loving deals.
“A few years ago — say 1999 or 2000 — we might have agreed with The Audit. The media adored deals then, best exemplified by all those big merger ‘scoops’ that were strategically leaked to the WSJ in exchange for good placement and generally positive stories. The Audit hints that this is still going on — it lists the ‘business press infrastructure’ and the ‘public-relations infrastructure that manages major deal announcements’ as factor behind ‘the unproductive deal churn.’ But we haven’t seen a rash of really egregious placements for years.”
Read more here.
Goods news vs. bad news
by Chris Roush
Earl Maucker, the editor of The Sun-Sentinel in Fort Lauderdale, answered a reader’s questions in Sunday’s paper about whether it had placed stories about the Dow Jones Industrial Average reaching record highs in the same position in the paper this past week as did earlier this year when the market dropped.
The reader argued that the paper plays up bad news but downplays good news. Maucker disagreed.
Maucker wrote, “News of the Dow setting records? Sure, we had it.
“Last Thursday we had a story headlined: ‘Dow pushes higher, posts first close above 12,800.’ And on Saturday we had a major story: ‘Dow closing in on 13,000 thanks to strong earnings.’ Both were on the front of our Business section.
“On Thursday this week, once the Dow passed the 13,000 threshold, it was front page news.
“Editors don’t always get it right, but generally we have a feel for what is important to the communities we serve.
Read more here.
BloggingStocks.com celebrates one-year anniversary
by Chris Roush
Sarah Gilbert writes on BloggingStocks.com about the web site’s one-year anniversary. The site is an AOL venture that has dozens of writers analyzing stocks.
Gilbert wrote, “About this time 366 days ago, I was madly preparing for the launch of what I then thought was the most important project for which I’d ever been ready to work ’til 1 a.m. I had hopes of making, maybe two million pageviews a month, in the next year.
“By February 2007, we’d reached three million pageviews according to MediaMetrix. And my universe of eight stocks, which I hoped to expand to 25 by this time, has now crested 350. Naturally, we’ve shifted strategy a bit since the beginning and no longer expect our writers to explore each stock we cover quite so deeply.”
She concluded, “We’ve discovered the things you want to read about; Wal-Mart, for one, and organics, for another. You like reading about Starbucks (and whether or not it’s evil, or the next McDonald’s), you like to read about the iPhone and its release date. You love scandals, like those involving Maria Bartiromo and Julie Roehm.
“And naturally, the one thing I can predict with absolute certainty for the upcoming year: we’ll give you more of the same, more Wal-Mart, more big calls, more iPhone, more tales of evil corporations, more scandals. And if Maria Bartiromo or Suze Orman does anything of note? We’ll tell you exactly what we think about it, right here on BloggingStocks.”
Read more here.
Papers downplaying new stock record
by Chris Roush
Hal Morris, writing on his GrumpyEditor.com blog, noted that few newspapers this week put stories of the new Dow Jones Industrial Average records on the front page, in contrast to the huge selloff back in February that was front-page news.
Morris wrote, “Grumpy Editor, surveying Thursday’s front pages, noted The New York Times, Washington Post, Los Angeles Times, Chicago Tribune, Miami Herald, Boston Globe, Detroit News, among most other newspapers — with an abundance of breaking developments — decided to place the bright financial news elsewhere.
“This is in contrast to page 1 treatment, in many cases, following the big Feb. 27 selloff which saw the Dow industrials tumble 416 points.
“Then for a second day in a row yesterday, the Dow industrials reached another record, up 4.79 to 12808.63, although the broader market dipped from the prior day.”
Read more here.
The biz magazine cover story as contrarian indicator
by Chris Roush
Mark Hulbert writes on Marketwatch about a study by some University of Virginia professors that assesses whether a company being on the cover of a major business magazine such as BusinessWeek, Forbes or Fortune means that it’s time to sell the stock.
Hulbert wrote, “The professors analyzed those cover stories in Business Week, Fortune and Forbes between 1983 and 2002 that featured a particular company. The professors placed each of these stories into five categories according to the message conveyed by its headline, ranging from very positive to neutral to very negative.
“One of the first things the professors found upon analyzing these categories is that positive cover stories tended to appear following periods of strongly positive performance, while negative stories usually came in the wake of very poor returns. This isn’t that surprising, the professors write, given the ‘disadvantages of weekly and biweekly business news magazines in reporting news in a timely manner.’
“In other words, it’s rare for a cover story in a news magazine to contain significant new information about a company. To put that another way, odds are high that the price of the stock will already reflect whatever information is contained in the cover story.
“No wonder positive cover stories come after rising stock prices and negative features following declining issues.
“How do the stock prices perform after the cover stories appear? Here a different picture emerged.
“The professors found that there was relatively little difference going forward between the returns of stocks that were the subject of positive stories and those for which the message was negative. As a general rule, the professors conclude, ‘positive stories indicate the end of superior performance and negative news generally indicates the end of poor performance.’”
Read more here.
Traders profit best when ignoring financial news
by Chris Roush
Jonathan Hoenig, a manager at a hedge fund, writes on the SmartMoney.com web site that the best investors do well when they ignore what they read about in the financial press.
“The printed word is not bound by a ‘hard out’ commercial break, so I opt to read my financial news. Some of it is actually useful, and reading itself also happens to be relaxing and pleasurable activity. Like Alan Greenspan, I spend many hours in the tub with a stack of reading material about the financial world.
“I try to read only select financial news, not analysis or opinion. And I’ve trained myself to read it in a particular way, concentrating on certain elements and either discounting or skipping others altogether.”
Read more here.