It emerged after the market closed that Mrs Rinehart was trying to sell about one third of her 15 per cent stake in the struggling media company.
Morgan Stanley was offering around 117 million shares on behalf of Mrs Rinehart for 50 cents a share - one cent below their Thursday's closing price.
The ABC has confirmed the sale has now been pulled because of a lack of demand at that price.
Mrs Rinehart increased her stake in Fairfax to almost 19 per cent earlier this year, but in July cut it to just below 15 per cent.
The latest attempted sale comes as Fairfax revealed a record annual loss.
The $2.7 billion loss was attributed to nearly $3 billion worth of write-downs and restructuring costs.
The result was seven times worse than last year's loss of $390 million.
The company also reported a 6 per cent fall in revenue to $2.3 billion.
Fairfax chief executive Greg Hywood said that was due to the worst advertising market in around three decades.
"I have been in this industry since the late-1970s and I have never seen an advertising environment of the type that we are currently experiencing," he said.
"I also know that cycles come and cycles go, and inevitably this will pass."
But Macquarie Private Wealth's Martin Lakos says he is not so sure Fairfax can make itself attractive to advertisers.
"I think what the market is still uncomfortable about ... is the company basically said 'economic decisions remain challenged in our core advertising markets.' That sort of outlook statement really doesn't auger that well for the coming half," he said.
Newspaper expert Andrea Carson, from the University of Melbourne, says the billions of dollars that seem to have gone up in smoke is no more than a basic accounting adjustment and does not reflect the business's cash flow position.
"It's non-cash write-downs so it doesn't actually affect the bottom line of the business," she said.
"This is still a business that's able to turn over profit, it's just reflective of what its long-term prospects are, I guess in terms of what the overall worth of the company is."