News Corp. Agrees to Invest in Video Distributor Roo
Roo will give News Corp. a 5 percent stake in itself and will deliver as much as another 5 percent once certain revenue- based milestones are met, the company said today in a statement. Other terms of the agreement with News Corp. weren't disclosed.
News Corp.'s use of Roo's service may lead to an increase in its stake, Roo said. Used to deliver television clips by Web search provider Lycos U.K., investment site TheStreet.com and publisher Lonely Planet, Roo competes with Brightcove Inc. and other Internet-based video distributors. Among major Roo backers are Tudor Investment Corp. and Ashford Capital Management.
Shares of Roo jumped 25 cents, or 8.7 percent, to $3.14 in over-the-counter trading at 4 p.m. today and have risen 3 percent in the past year. News Corp.'s Class A shares fell 8 cents to $22.82 in New York Stock Exchange trading and have gained 45 percent in the past year.
Roo, based in New York, has about 26 million shares outstanding, according to Bloomberg data. A 5 percent stake in the company based on Jan. 26's closing price of $2.89 would have been worth about $3.75 million.
The Wall Street Journal reported earlier today that the value of New York-based News Corp.'s investment was about $12 million, without citing a source.
To contact the reporter on this story: Ted Bunker in Boston at tbunker1@Bloomberg.net.
To contact the editor responsible for this story: Emma Moody at emoody@Bloomberg.net.