(Bloomberg News) News Corp.'s loss of $7 billion in market value over four trading days shows investor concerns that a probe into alleged phone hacking by journalists at one London newspaper could have a broader impact on the company.

Rupert Murdoch's New York-based media company tumbled $1.27, or 7.6 percent, to $15.48 in Nasdaq Stock Market trading yesterday, the biggest drop since April 2009. It was the fourth straight decline in the company's closing price, cutting its market value by 15 percent to $41.2 billion.

The slide is far out of proportion with the lost profits from closing the News of the World tabloid or from delaying the acquisition of the satellite-TV provider British Sky Broadcasting Group Plc, said David Bank, an analyst at RBC Capital Markets in New York. Investors are concerned about the scandal's effect on other News Corp. holdings, which include the Fox TV networks and film studios, the Wall Street Journal and three other newspapers in the U.K.

"There's a lot of noise out there," said Bank, who rates the stock "outperform" and doesn't own any. "These headlines cause massive swings in sentiment and stock price, leaving a cloud of uncertainty about how deep the allegations go."

The most immediate questions involve News Corp.'s $12.4 billion bid for BSkyB. Yesterday, U.K. Culture Secretary Jeremy Hunt said he will refer the proposed deal to the country's Competition Commission, which will spend at least six months on a review. That will be followed by "intensive discussions," Hunt told lawmakers in London.

'Reconsider' Bid?

U.K. Deputy Prime Minister Nick Clegg yesterday asked Murdoch to "reconsider" the BSkyB offer following allegations that News of the World tabloid hacked into voice mails of terror and murder victims and paid police for stories. U.K. Labour Party leader Ed Miliband told BBC Television the day before Murdoch should drop his buyout bid.

"It will be hard for the government to approve the bid, either now or at some point in the future," said Ian Whittaker, a London-based analyst at Liberum Capital.

News Corp., which already owns 39 percent of BSkyB, wants full control to gain access to the broadcaster's increasing cash flow. BSkyB may also help Murdoch make News Corp.'s newspapers more profitable by allowing him to bundle print and pay-TV subscriptions and spread content over media platforms.

In a statement yesterday, News Corp. said it still anticipates it can win regulatory approval.

"News Corp. continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the U.K.," the company said.

'Blagging'

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

News Corp. may also face questions over other U.K. businesses, said Laura Martin, an analyst at Needham & Co. in Los Angeles. The company, which also publishes the Sun, the Times and the Sunday Times, said yesterday it will investigate whether its journalists broke the law to obtain the bank, medical and legal records of former Prime Minister Gordon Brown.

The Guardian reported that both the Sunday Times and the Sun obtained files using techniques known as "blagging," where people impersonate someone over the phone in order to access private information. The Sun obtained details of the private medical files of Brown's son Fraser, while someone working for the Sunday Times acquired Brown's legal records and tried to gain access to bank statements, the Guardian said.

Out Of The U.K.?

"We note the allegations made today concerning the reporting of matters relating to Gordon Brown," News Corp.'s News International unit said in an e-mailed statement. "So that we can investigate these matters further, we ask that all information concerning these allegations is provided to us."

If the scandal spills over to other News Corp. newspapers, the company may decide to sell the business, said Martin.

"The stock price is implying that News Corp. is going to have to get out of the U.K.," she said in an interview.

News Corp. may also face legal expenses related to the phone-hacking charges. Amalgamated Bank of New York filed an amended complaint against the company that was made public yesterday.

"These revelations should not have taken years to uncover and stop," the bank said in the amended lawsuit filed July 8. "These revelations show a culture run amok within News Corp. and a board that provides no effective review or oversight."

Amalgamated, as a trustee for funds through which it holds almost 1 million News Corp. shares, sued the directors on behalf of the company in Delaware Chancery Court in Wilmington in March. The bank accused Murdoch of nepotism in the purchase of Shine Group Ltd., his daughter's U.K.-based television production company.

Question Of James

Investors may also be concerned the hacking probe could impede the ascension of Murdoch's son, James, who has been expected to eventually replace his 80-year-old father as chief executive officer, according to Needham's Martin.

"What the market is saying is that the succession of Rupert by James is being brought into question," said Martin, who rates the stock "buy" and doesn't own it.

James, 38, is deputy chief operating officer of News Corp. and since 2007 has overseen News International, the unit of the company that operates the U.K. newspapers.

In a note to employees to announce the closure of the News of the World, the younger Murdoch said the company had misled the British Parliament. During hearings in 2007 and 2009, executives including Les Hinton, former News International chairman, and Colin Myler, News of the World editor, said that there was no evidence that more than one reporter had been involved in phone hacking.

Money Or Power?

"I now know that I did not have a complete picture when I did so," Murdoch said, referring to his approval of out-of- court settlements to hacking victims, made in return for non- disclosure agreements. "That was wrong and is a matter of serious regret."

Teri Everett, a spokeswoman for News Corp., declined to comment.

Rupert Murdoch may ultimately have to decide whether his priority is political influence or financial gain, said Jeff Jarvis, director of the Tow-Knight Center for Entrepreneurial Journalism at the City University of New York Graduate School of Journalism. While being in the news business garners power and influence, shareholders don't want it to hurt the more profitable areas of the company, he said.

"I think it may be necessary for them to get out of the news business to protect the rest of the company," Jarvis said in an interview. "Does money trump power? I think it does. Right now, this news business is causing problems."