Rupert Murdoch's beleaguered News Corp., whose stock has plummeted 11% since the company's phone hacking scandal blew up last week, on Tuesday announced plans to repurchase $5 billion of its own stock.
With News Corp. shares down, management might be using the opportunity to both prop up the company's stock as well as pick up shares at a bargain price.
The company is under pressure because of a widening scandal involving its British newspapers hacking into phones of individuals it was writing about. The scandal has delayed News Corp.'s purchase of the stake in British Sky Broadcasting it does not already own.
News Corp. said the new buyback program increases the $1.8 billion remaining under its earlier buyback plan. Repurchases will be made through open market transactions. Because the company is currently in a blackout period, it doesn't intend to buy shares until the period ends on August 15. The company is n't obligated to buy shares and the program may be modified at any time.
On Tuesday morning after the buyback announcement, News Corp. shares were up 0.87% to $16.24.