MySpace = 30% Of Yahoo? Murdoch Hopes So

Rumor is (and it isn’t so much a rumor, since Rupert Murdoch’s newspaper floated the story) that News Corporation would like to trade Yahoo MySpace in return for 30% of Yahoo in stock. News Corp bought MySpace for $580 million two years ago, and while it is agreed to be a great investment, MySpace’s slowing growth compared against rising star Facebook makes it the right time for Murdoch to unload it for a nice profit. News Corp is also offering IGN, bought for $650 million, to Yahoo in the deal.
If Yahoo made the deal, it would value MySpace and the other pieces at $12.3 billion of a $49 billion Yahoo (currently Yahoo is worth $37 billion, and the new stock would increase its market cap significantly). However, the new shares could significantly dilute the stock; if the stock drops, News Corp could wind up with far less […]

Original post by Nathan Weinberg