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AT&T Shares Climb After Warner Bros. Discovery Deal

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A scene from HBO’s series ‘Winning Time: The Rise of the Lakers Dynasty,’ now a Warner Bros. Discovery property.
Photo: Warrick Page/HBO/Associated Press

AT&T Inc. shares climbed Monday in the first trading session after completing a deal to merge the company’s media business with Discovery Inc.

The telecom company’s stock rose 7.7% to $19.63, while shares of the new company, Warner Bros. Discovery Inc., gained 1.3% to $24.78. 

Investors who looked at the stock prices Monday morning could be…

AT&T Inc.
shares climbed Monday in the first trading session after completing a deal to merge the company’s media business with Discovery Inc.

The telecom company’s stock rose 7.7% to $19.63, while shares of the new company, Warner Bros. Discovery Inc., gained 1.3% to $24.78. 

Investors who looked at the stock prices Monday morning could be forgiven for feeling confused, though.

AT&T shares closed Friday at $24.14, shortly before AT&T and Discovery said the spinoff and merger were complete. AT&T shareholders received about 0.24 share in the new company for each share they owned. The price of AT&T’s stock, meanwhile, was adjusted lower to reflect the spinoff. With that adjustment, it closed Friday at $18.22.

Not all financial data providers adjusted the historical prices, leading it to appear in some cases that AT&T shares were down about 20% Monday.

The new company combines Discovery’s cable networks, including TLC, HGTV and Food Network, with WarnerMedia’s movie-and-TV production units, the HBO/HBO Max premium services and news network CNN.

Warner Bros. Discovery shares actually traded last week on what is known as a “when issued” basis. That refers to trading in a security that has been authorized but not yet issued. 

During that time, AT&T shareholders had the option to sell their right to receive shares of Warner Bros. Discovery while holding on to their shares of AT&T. Such trades took place under the temporary ticker symbol WBDWV.

AT&T shares, meanwhile, changed hands in what is called “two-way trading.” Investors could sell shares of AT&T together with the accompanying right to receive Warner Bros. Discovery shares. Or, under a temporary ticker symbol “T WD,” they could sell shares of AT&T while retaining the right to get Warner Bros. Discovery shares through the spinoff.

Monday’s session marks the first day of “regular way” trading in the new company’s shares under its ticker WBD.

Corrections & Amplifications
AT&T shares closed Friday on a spinoff-adjusted basis at $18.22. An earlier version of this article incorrectly said they closed at $18.27. (Corrected on April 11)

Write to Karen Langley at karen.langley@wsj.com

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