News Corp. shares drop after analysts cut outlook
They cite concerns about profit growth for its MySpace social network and the need to invest in Dow Jones & Co.
Shares of media company News Corp., controlled by Rupert Murdoch, fell the most in five years after Sanford C. Bernstein & Co. and UBS analysts cut their outlook for the stock, citing concerns that growth will slow.
Bernstein's Michael Nathanson reduced his 12-month share-price target to $21 from $24 and lowered his rating to "market perform" from "outperform" in a note Monday. UBS's Michael Morris cut his price projection to $25 from $26.
Profit growth is likely to slow because the MySpace social-networking website will fail to meet targets, Nathanson wrote. Dow Jones & Co., acquired in December, will require additional investment and might be slow to turn around because of weak newspaper advertising, he wrote.
"We are wary of News Corp.'s relative positioning in this intensely competitive business that features established players including Google and Yahoo," Morris said.
Class A shares of the New York company fell 86 cents to $18.14.
Valeant shares down sharply
Shares of Valeant Pharmaceuticals International fell the most in five months as the Costa Mesa drug developer regroups after its president quit last month.
Valeant reported April 1 that its president, Charles J. Bramlage, quit in late March and that it couldn't estimate the costs of a planned restructuring, which includes firings and asset sales.
The price fell $1.12, or 8.3%, to $12.44 a share, and earlier declined 10%.
Valeant also fell in early November after third-quarter earnings missed estimates. The number of shares traded nearly tripled to 3.33 million, compared with a three-month average of 1.17 million.
Dell bond sale raises $1.5 billion
Dell Inc., trying to regain its position as the largest maker of personal computers from rival Hewlett-Packard Co., raised $1.5 billion in its first bond offering in a decade.
The company, which 23 years ago pioneered selling custom-made PCs directly to customers, is tripling its debt load as Chief Executive Michael Dell attempts to revive profits by selling more machines in stores, offering fewer model choices and closing a factory in Texas.
Dell may also need to issue more debt if it provides additional customer financing, according to Fitch Ratings.
Based in Round Rock, Texas, Dell follows software maker Oracle Corp. in coming to the bond market this month as investors seek alternatives to financial debt that has tumbled in value. Oracle raised $5 billion in its largest offering in two years.
