Is Print Dead, or Will These Spinoffs Be Great Investments? – News Corp (NWS), Time Warner Inc (TWX)

In all, News Corp (NASDAQ:NWS) publishing still posted a net loss of $2.1 billion in its last fiscal year. This was partially due to the phone-hacking scandal and restructuring costs, but sales were down 5% year over year.

Time owns 21 U.S. magazines, from Time to Sports Illustrated to Fortune. Sure, these are the top names in the magazine business, but that’s like owning the fastest sloth these days. According to Time Warner Inc (NYSE:TWX)’s recent 10-K, Time is the largest magazine publisher in the world by advertiser volume. Is that valuable on its own? Possibly, but it hinges on having each of its publications perfectly transition away from print, because print magazines were dead yesterday.

Niche niche?
You aren’t buying a turnaround play if you invest in either spinoff. These are companies that face an uphill battle, and the odds are against them.

The sole factor in deciding whether either of these spinoffs is worth your time is their price. News Corp (NASDAQ:NWS) and Time Warner Inc (NYSE:TWX) probably know that these stocks will receive soft demand and that, when they distribute shares of the newly formed companies to existing shareholders, investors will probably dump the shares immediately and take the profit. This does leave opportunity for bargain-hunting, cigar-butt-puffing stock pickers. It’s all about price, though. When we see the initial offering price, then we can determine whether there’s a play here. After all, I’d love to pay $0.50 for a $2.00 Wall Street Journal.

The article Is Print Dead, or Will These Spinoffs Be Great Investments? originally appeared on Fool.com.

Fool contributor Michael Lewis and The Motley Fool have no position in any of the stocks mentioned.

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