Excuse me, Paul, since I was in here when John posted:
John,
They are two completely different scenarios. Tracking stocks in general have had a checkered, short history. Ignore the differences between TCOMA and UMG at your peril.
When USW and UMG split, basically the only thing they had in common was the BOD and the ability to draw from each other's HR pool. All cash flow from one group of subsidiaries was allocated to USW, the rest to UMG. I don't believe there was any overlap in interests. I believe it has been a prelude to the ultimate break up of the company. TCOMA, on the other hand, has a myriad of cross holdings and partial ownerships.
As to what happened when they split? For a month or so prior to the split, the stock price beat the market nicely. After the split, USW kept all the dividend the combined company had paid out. It rose greatly in value because suddenly it had a very high yield, which attracted certain investors. Boy, that was a great, profitable party! I haven't paid too much attention since I took the money and ran, but I think it has more or less tracked interest rates or drifted down with other telecoms. UMG peaked shortly after the split, in February I believe (split in early December), and then got bashed like all the other CATV companies for the remainder of the year. Also, all the stockholders (widows and orphans) who were in USW for the dividend probably dumped UMG, as it was being positioned (shudder) as a growth stock. It is still under its February peak of a year ago. Percentage-wise TCOMA fell a lot further. Does that mean it has more bounce? We'll see.
By the way, you said something in another post that makes me think you believe UMG has an interest in @Home. It does not. |
