Investors in the Content Business Dwindle Again?

24/7 Wall St.

The argument goes that if News Corp. (NASDAQ: NWS) spins off its print businesses, they will be unable to keep their editorial costs at current levels. Some of the properties in this new operation may be profitable enough to sustain those that are not. Even so, Wall St. will still want to see cuts to improve margins. The new spin-off corporation might fall under the same expense pressure experienced by public corporations like CBS (NYSE: CBS); Gannett (NYSE: GCI); New York Times (NYSE: NYT); Time Warner (NYSE: TWC), which owns TIME Inc.; and Walt Disney (NYSE: DIS), which owns ABC.

Less than a half a dozen large companies continue to invest in their news businesses. Reuters and Bloomberg have added to their editorial staffs and continue to do so. But most experts believe that is not because their managements essentially believe in strong journalism…

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J.P. Morgan’s Growing Loss Weighs on Banks

24/7 Wall St.

J.P. Morgan Chase & Co. (NYSE: JPM) is weak this morning on word that the bank’s trading losses will be much wider than originally reported.  The market knew that the loss would be at least $2 billion, but for the trades to unwind the bank’s ultimate loss is one which we will not fully know until the bank’s earnings report in July.  Even then, the full loss may not be known.

The New York Times has a scathing report showing that the trading loss may total as much as $9 billion.  Other news outlets are calling it $9 billion in a headline “one-upping effort” and that may be skewing the news. We were expecting the loss to widen further from the $2 billion, maybe to as much as $4 billion or even $5 billion.  But up to $9 billion?

This trading loss, and the image blow to…

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Glencore, Xstrata Merger on the Rocks (GLCNF, XSRAY, BHP, VALE, RIO)

24/7 Wall St.

The announcement last February that Glencore International AG (OTC: GLCNF) would acquire mining giant Xstrata plc (OTC: XSRAY) has always faced one very big problem: just 17% of Xstrata shareholders voting against the deal can kill it. Glencore, which already owns 34% of Xstrata, cannot vote in the deal that has recently been pegged at a value of $58 billion. Some earlier estimates of the deal’s value ran as high as $90 billion.

Whatever. The latest threat to the merger is a demand from Qatar Holdings — the sovereign wealth fund that owns 11% of Xstrata — that Glencore boost its offer by 16%, from 2.8 shares to 3.25 shares of Glencore stock for every share of Xstrata.

Qatar Holdings’ demand follows a dispute over a retention package for Xstrata’s senior managers worth about $270 million. The total payout to Xstrata employees would be around $337 million. Originally to be…

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