AT&T's New Tracking Stock May Pose Risks, Times Column Says
Bloomberg News
June 28, 1998, 11:27 a.m. PT
AT&T's New Tracking Stock May Pose Risks, Times Column Says
New York, June 28 (Bloomberg) -- AT&T Corp.'s new stock tied
to its consumer-services division, to be issued in connection
with its planned $44 billion purchase of Tele-Communications
Inc., may pose more risks to investors than holding shares of
AT&T outright, which reflect the performance of the
telecommunications company as a whole, according to the New York
Times' ''Market Watch'' column. While companies often benefit by
issuing these so-called tracking stocks when a piece of their
business is strong or perceived as growing, holders of these
shares get neither voting rights nor ownership in the assets
whose performance the stocks track. Tracking stocks issued by
Circuit City Stores-Circuit City Group, Genzyme Corp. and Georgia-
Pacific Group have all fallen from where they were issued, though
TCI's two tracking stocks -- Liberty Media Group and Tele-
Communications TCI Ventures Group -- have both climbed.
AT&T, the largest U.S. long-distance company, said Wednesday
it agreed to buy TCI in exchange for stock and assumed debt, in a
bid to use the wires of the nation's No. 2 cable company to
provide local telephone and Internet services.
(NYT 6/28 3-1, www.nytimes.com)
--Beth Williams in the New York newsroom (212) 318-2307/jcn
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