News Corp's shares rose less than 1 percent to $15.57 in early trading Tuesday as Rupert Murdoch's media conglomerate responded to investor pressure to support the stock. Shares earlier rose more than 2 percent on the news of the buyback.

The company, which is home to the Fox television network, the Wall Street Journal and a clutch of British newspapers at the center of the phone hacking scandal, said Tuesday it would increase the program of about $1.8 billion remaining under the company's current buyback to $5 billion. That is about 16 percent of the company's market capitalization.

The program includes class A and class B stock.

Investors during the past week suggested that News Corp should buy back shares rather than pursue its $14 billion acquisition of UK satellite operator BSkyB. The phone hacking scandal, which began at the now-defunct News of the World newspaper, has thrown the deal's success into doubt.

"This is clearly a positive. It's accretive to earnings, and shareholders had been hoping for this for some time," said Evercore Partners analyst Alan Gould. "It's a step in the right direction, and the stock should hold up relative to the market."

Analysts estimate News Corp had around $13 billion of cash on its balance sheet as of June 30 and will use some of that cash for the buyback in lieu of its delayed BSkyB acquisition.

"The balance sheet was very inefficient" said Gould.