Subpoena Issued in Dow Jones Stock Inquiry | By REUTERS | Published: May 6, 2007
Dow Jones & Company said yesterday that the New York state attorney general and federal securities regulators were investigating unusual trading in its stock and options before it announced a takeover bid by the News Corporation last week.
Dow Jones, which runs a financial newswire service and publishes The Wall Street Journal, said Tuesday that it had received a $5 billion bid from the News Corporation, after CNBC reported the bid that morning.
A Dow Jones spokesman said the company had received a subpoena from the attorney general and an inquiry from the Securities and Exchange Commission.
A spokesman for the News Corporation said his company had received similar documents.
Leading up to the announcement, a surge in volume in Dow Jones’s June and September call options, which allow investors to buy shares at a specific price and time, suggested to some analysts that some investors knew an offer was in the works.
On Monday, 3,464 call options were traded betting that the company’s share price would reach $45 or above by September, said Michael Schwartz, chief options strategist at Oppenheimer & Company in New York. the same day, he said, 641 call options were traded betting that the price would hit $40 or above by June. ...
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