Tue - 23 Oct - TNI - Mirror phone hacking allegations

Good morning! No report yesterday, as there wasn't anything of interest to me on the RNS.

Today we have a sharp markdown (13% to 62p a the time of writing) on Trinity Mirror (TNI) over revelations overnight that it is alleged to have been involved in phone hacking. Well, Queen Anne's dead! Of course it was, they all were - this is an industry-wide problem, and once one journalist cottoned on to the fact that it's a doddle to access anyone's mobile phone & listen to their messages, this trick would have spread like wildfire.

Indeed, Piers Morgan even explained the technique in his memoirs, published in 2005, a copy of which I have here. He of course dressed it up in faux innocence, saying something like, apparently there is this technique that ...., etc.

It's going to mean some costs, and potentially some compensation, but this long after the event it will be difficult to prove in Court, and newspapers are sued all the time, it's par for the course. Do the public actually care that some celebs got caught with their trousers down, using this method? Not in the slightest, in my experience.

The supposed scandal was used as a stick to beat Murdoch, but I don't see that same level of outrage (which was largely manufactured by Guardianistas) being directed at the Mirror's advertisers in the same way. Why would Lefties want to stir up hatred against the only Leftie tabloid? Answer, they won't.
As long as TNI distance themselves from Piers Morgan, then they should be fine.

In any case Murdoch used the NotW scandal (which concentrated on the genuine public outrage over the Milly Dowler case) as an opportunity to strip out duplicated costs by closing NotW and moving the Sun over to 7 day operations. It's difficult to see any read across to the Mirror. They will just deny it, and throw Piers Morgan to the wolves, which most people will view very positively! His evidence to the Leveson enquiry was painful to watch too - he may think he's an accomplished liar, but my reading of his body language made it very clear to me that Morgan was lying through his teeth! Of course he knew about phone hacking, as admitted in his memoirs.

Now it's out in the open, I would say a 5% markdown in price is probably enough to cover the total costs. Hence this morning's 13% reaction seems overdone, and it's on fairly small volume (about 1m shares at time of writing), so not something that concerns me longer term. But obviously make up your own mind, these are just my personal opinions.

I'll report on other company RNSs shortly, just wanted to get this comment out first.

Regards, Paul.