Fake News MattersDow Jones Meter Moves To 95%

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For a couple of weeks, shares of Dow Jones & Company have been trading below the $60 price Rupert Murdoch offered, which most likely reflects a slight discount for risk that the deal won’t ever go through, skepticism about the notion that Murdoch might offer even more money for the media company and the belief that the deal won’t close immediately. We’ve had the Murdoch Meter, which measures the chance of Murdoch buying the company at his offer price, fixed at 90% for some time. And shares have been trading between $58 and $57.
This morning world came from across the Atlantic that negotiations with the Bancroft family were done and a deal announcement was imminent. Shares jumped on the open and kept climbing despite reports on CNBC and DealBreaker quashing the rumor. They’re now at $59. This pushes our auto-arbitrage meter up to 95%.
Ordinarily we’d just correct the meter if it moved on fake news. But we’re hearing things that are convincing us that although the Bancroft family may not yet have formally accepted the offer, an announcement may be coming soon. The right people—lawyers, bankers—are busy this weekend, not making appearances at places we expected them to be. And they are clamming up, as they often do before a deal is announced to the market. From this, well, anti-leaking we’re reading an imminent deal.
Of course, since so much of this depends on what is decided a very few individuals who happen to be descended from people who bought the company a few generations ago, this could all change. But we’re following the arbs and fake news today and moving the meter up to 95%.

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