Reuters
AT&T to lose 300,000 shareholders in reverse split
Thursday November 14, 6:19 pm ET
NEW YORK, Nov 14 (Reuters) - AT&T Corp. (NYSE:T - News), once viewed as the stable investment of widows and orphans, will lose about 300,000 of its smallest investors as it reduces the number of common shares through its its reverse stock split.
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When AT&T completes the sale of its AT&T Broadband cable television unit to Comcast (NasdaqNM:CMCSK - News), which is expected next week, it will conduct a one-for-five reverse split of its common stock. That will boost AT&T's stock price stock by cutting the number of common shares outstanding. AT&T currently has about 3.85 billion shares outstanding.
Shareowners will get one share for each five shares of AT&T they own. The overall value of their investment will not change even though the price of AT&T's stock will increase. It is the equivalent of getting one $50 bill in exchange for five $10 bills.
Investors with fewer than five shares of AT&T stock will get cash in lieu of stock. As a result, about 300,000 investors will get a check in the mail and no longer be shareholders of the No. 1 U.S. long-distance telephone company, AT&T said.
AT&T, one of the most widely held U.S. stocks, has about 3.4 million shareholders. The company declined to comment on the money it will save from having fewer shareholders.
The exact amount of shareholders getting cash will be determined on the "record date" for the broadband spinoff. The record date will be set within days.
After the cable spinoff, AT&T's remaining operations will provide voice and data services to about 4 million corporate customers and 60 million residential customers. The sale of AT&T Broadband ends AT&T's efforts to create a one-stop shop for telephone, data, wireless and entertainment services. |
