Investors flee from News of the World as corporate backlash gathers pace
Shares in News Corporation fell in New York yesterday (July 6th) as advertisers pulled the plug on their deals with the News of the World amid fresh phone hacking allegations.
The company, whose UK subsidiary News International publishes the Sunday tabloid, saw its stock drop by 3.6 per cent.
Investors were responding to the prospective loss of revenue caused by the withdrawal of advertising, as well as fresh doubts over the firm's proposed merger with BSkyB.
MPs on both sides of Parliament urged Ofcom to launch an immediate investigation into the deal - which would see News Corporation acquire the 61 per cent of BSkyB it does not currently own - in the wake of the phone hacking scandal.
Ford, Vauxhall, Mumsnet and the Co-operative have all suspended their advertising contracts with the News of the World following accusations its journalists hacked into the mobile phone voice messages of murdered schoolgirl Milly Dowler and the parents of Soham victims Holly Wells and Jessica Chapman.
Meanwhile, Halifax, Virgin Holidays and Cadbury have all said they will not run adverts in this weekend's edition of the paper.
Prime minister David Cameron confirmed a public and independent inquiry will be set up into the phone hacking scandal, as well as the original police investigation into the matter.
However, he went on to point out that this would be unlikely to start until current police investigations into the issue have concluded.
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