News Corp. (NASDAQ:NWSA) has reportedly attracted the attention of activist hedge fund Starboard Value, run by Jeffery Smith. The hedge fund believes the stock is trading at a considerable discount to its fair market value. According to a Reuters report on Friday, Starboard has purchased shares of News Corp, but details of the purchase have not been released. In addition to this, Starboard Value plans to implement some strategic and governance changes in the company.
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As part of the strategic changes, the hedge fund is seeking a spin-off of News Corp.’s digital real estate division. Moreover, Starboard Value is pushing for News Corp. to abandon its dual-class share structure. The key reason behind this change is that the current structure grants Rupert Murdoch and his family higher voting power than their ownership.
It is important to mention that Rupert Murdoch will be leaving his position at News Corp. in November. His eldest son, Lachlan Murdoch, will become the sole chair of News Corp.
Given that the Murdoch family has about a 40% voting stake in News Corp., the hedge fund may face a few challenges in implementing these changes.
What is News Corp.’s Price Forecast?
On TipRanks, the average News Corp. stock price target is $28.13, which implies 34.5% upside potential from current levels. The stock has a Strong Buy consensus rating based on four unanimous Buy ratings. Meanwhile, NWSA stock has gained 15.5% year-to-date.
