sky falling in??

There has been more than enough ink spilled over the NOTW scandal; only a few points really need to be said;

1. if hacking is institutional within NOTW, then it will be present in other papers
2. the police's role is a much bigger issue, witness Guardian reporters getting information illegally as to where Coulson is being held, etc. venal.
3. the attacks on news corp are politically driven, as are the attempts to block the bid for bskyb, the bbc moaning about too much media power is ridiculous.

so what though, none of that is going to make me a penny, the price action in b sky b (BSY) share may well do though. They've fallen about 150p down to 700p, what is the price level where one would take a punt then?

Well looking at the pre-bid price of 560p, the 30% return in the FTSE since the bid and the stock having a pre bid adjusted beta of 0.92 that would give 714p as the floor, which its currently trading through. There the very low probability that somehow Newscorp actually get made to reduce their BSY shareholding, or it becomes permanently blocked. Additionally the FTSE isn't a great index to measure BSY against.

Bottom up, fair free operating cashflow of ~£1,300mm, inc growth of 10% a year for the next few years, at we're talking about a forward multiple of ~ 11x, that's not too ugly a price.

Thinking of picking up a clip at 680p, with another at 570p.

The trade that has made money though, has been selling Trinity Mirror shares which popped on the news that NOTW was closing. If anything, from this point forward its only going to be negative news, without even looking at valuation we slapped out a clip this morning.