Fairfax shares fall
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Fairfax Media shares have suffered heavy losses in early trading after shooting up on Monday.
Fairfax stocks were 3.0 cents, or 4.6 per cent, weaker, at 62 cents at 1210 AEST.
City Index chief market analyst Peter Esho said he thought Tuesday's retreat was partly linked to the fact that Australia's richest person, Gina Rinehart, might stop increasing her stake through her company Hancock Prospecting.
The multi-billionaire has confirmed she has an 18.7 per cent stake and would have to launch a formal takeover offer if her holding went above 19.9 per cent.
Mr Esho said he wasn't convinced she intended to make a takeover bid.
"I am not sure if that's her intention at the moment, but I wouldn't completely rule it out," Mr Esho said, suggesting a consortium might make a pitch.
Mrs Rinehart is believed to be seeking three seats on the Fairfax board and the right to make editorial decisions, including on the hiring and firing of editors.
Chairman Roger Corbett has reportedly offered her two board seats, but on the condition she not interfere with editorial content.
But her business ally, media entrepreneur and former Fairfax director John Singleton, said Mrs Rinehart should be free to hire and fire if it means the media company remains profitable.
Mr Singleton said while directors should not interfere with editorial decisions, Fairfax board members had a responsibility to shareholders.
"I think some editorial interference would have made the papers more readable in the past, don't you?" he told ABC radio.
"Editors are in fact hired by the CEO who is hired by the board.
"Businesses can't be held to ransom by employees, particularly if it means you are going to lose money."