Capping off a tumultuous period for Fox Corporation (NASDAQ:FOX, NASDAQ:FOXA) — which owns conservative-leaning Fox News — Chairman Rupert Murdoch just announced that he will step down from his role. Murdoch will also exit his role as Chairman of News Corp (NASDAQ:NWSA), which owns names like The Wall Street Journal and New York Post. This news has FOX stock and FOXA popping higher amid an otherwise down day for the market.
As CNBC reports, Murdoch will be “appointed chairman emeritus of each company.” Meanwhile, his son Lachlan Murdoch will become Chairman of News Corp and continue as Fox CEO and Executive Chairman.
Rupert Murdoch said in a note to employees:
“Our companies are in robust health, as am I […] We have every reason to be optimistic about the coming years – I certainly am, and plan to be here to participate in them.”
In the note, Murdoch also stressed the importance of freedom of speech and thought. Still, by pushing the boundaries of these ideals, FOXA stock has found itself in troubled waters lately.
Earlier this year, Fox agreed to pay Dominion Voting Systems $787.5 million to settle an election defamation lawsuit. Had a trial occurred, Murdoch, other executives and members of top talent could have had to take the stand. While that outcome did not occur, questions remain about Fox’s viability.
A Possible Inflection Point Materializes for FOX Stock
In April 2023, Fox News also dismissed host Tucker Carlson, sending shockwaves across the media. For stakeholders of FOXA and FOX stock, the matter was particularly pressing. Essentially, Carlson represented both a ratings bonanza and a source of significant controversy.
According to NBC News, following his ouster, various far-right personalities and “creators of hate and conspiracy theory content bemoaned the loss of Carlson and their path to a mainstream audience.” With that bridge burnt, the amplification of said views took a major hit.
In a way, FOX and FOXA stock have become victims of Fox’s own success. In 1996, Murdoch launched Fox News, offering viewers an alternative to other news organizations and “left-leaning” media. However, the rise of former President Donald Trump accelerated this ideological impetus to an uncomfortable peak. Per CNN, Fox News helped advance various, damaging conspiracy theories under Rupert Murdoch, most notably related to the 2020 presidential election.
CNN also reports, however, that Lachlan Murdoch has privately criticized Trump, “saying that he disagrees with much of the way the former President behaves.” With the key decisions Fox has made this year, the younger Murdoch may have an opportunity to pivot the organization back to its much more orthodox, conservative roots.
Why It Matters
At the moment, analysts peg FOXA stock as a consensus hold. This assessment breaks down as three buys, four holds and two sell ratings. However, the average price target for shares still lands at $38, implying roughly 18% upside.
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
