News Corp. Split Means Big Test for Stocks

New companies will begin normal trading on Monday

News Corp. completed the spinoff of its publishing assets Friday, setting the stage for both companies to prove themselves on the open market.

Shares for both companies began early trading on June 19, but normal trading will begin next week.

“The big event is really Monday,” said RBC Capital Markets analyst David Bank. “They’re two very different companies with two potentially very, very different investor bases.”

Early buyers will begin receiving their shares next week. Existing shareholders will get one share of the new publishing entity for every four shares of the new media company they own.

The preliminary market gave theoretical values for both new entities that will be tested next week when normal trading begins.

Early trading pegged the publishing division’s value at about $8.8 billion, according to published reports. Preliminary shares of the publishing company, which will keep the News Corp. name, closed Friday at $15.25.

Early trading for the media and entertainment company, 21st Century Fox, closed at $28.99. Analysts have pegged the company’s value around $67 billion based on preliminary trading.

Trading for both companies has already begun on the Australian stock exchange and has outperformed many analysts’ expectations.

21st Century Fox holds the company’s film and television studios. Its core cable channel business, which includes Fox, FX, Fox News Channel, Fox Sports Network, National Geographic Channels, STAR, Fox Pan American Sports, is a key driver of the new company’s value. Company also includes the Shine Group and pay television assets Sky Deutschland, Sky Italia and equity interests in BSkyB and Tata Sky.

The new News Corp. will now contain the companies publishing assets, including the Wall Street Journal and the New York Post.

“21st Century Fox launches as a unique force bringing news and entertainment to more than a billion customers every day in over 100 languages,” said  News Corp. and 21st Century Fox chairman and CEO Rupert Murdoch in a statement announcing the completion of the split. “Our success will continue to be rooted in a deep belief in originality and a commitment to empowering creative minds and entrepreneurs around the world.”

Split, which completed at 1:30 pm ET, finishes a process the company announced last June.