AT&T shares are down in pre-market trading after the telecom giant said it will spin off WarnerMedia as part of the entertainment unit’s pending $43 billion merger with Discovery.The company has faced the choice of whether to execute a spinoff or a split — while the financial maneuvers are technical, each has implications for shareholders.
AT&T has an unusually large number of individual, rather than institutional, investors. Shares in AT&T fell more than 4% before the start of the official trading day.
They have slumped ever since the Discovery deal was announced last May, as have Discovery’s.When the transaction closes, possibly as soon as next month, AT&T shareholders will own 71% of the Warner Bros.
Discovery, as the new entity will be called. They will get 0.24 shares of Warner Bros. Discovery for each AT&T share they own.
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