NEW YORK-WorldCom Inc. shareholders approved June 7 the creation of separate tracking stocks, which pursued separate pricing paths at the close of their first day of trading on Nasdaq June 8.
Under the plan, each share of WorldCom was converted into one share of WorldCom Group stock and two-fifths of a share of MCI Group stock.
The high-growth WorldCom Group stock tracks Internet, international operations and commercial services. It does not pay dividends. These shares closed late last Thursday at $16.10, down almost $2 from their opening price on their first trading day.
The new MCI Group tracking stock, which comprises business units that generate high cash flow, tracks the SkyTel wireless messaging unit, small-business services and long-distance calling. Each of these shares pays a quarterly dividend of 60 cents. The MCI tracking stock closed late Thursday at $18.11, per share, down 53 cents from their opening price.
Standard & Poor’s Corp. sees no impact on WorldCom’s low-tier, investment-grade credit rating of BBB+ or the outlook for the company’s debt ratings as a consequence of the tracking stock implementation, said Rosemarie Kalinowski, a telecommunications analyst for S&P.
In other restructuring news, AT&T announced it will split off AT&T Wireless as a separate independent company on July 9.AT&T Wireless tracking shares will be redeemed and converted into shared of AT&T Wireless common stock on a one-for-one basis on July 9. In addition, the company’s board of directors declared a special stock dividend of AT&T Wireless common stock to AT&T common stock holders of record on June 22, payable concurrently with the redemption.
AT&T Wireless stock took a plunge after the news, dropping almost a dollar to $15.50, dangerously close the company’s 52-week low of $15.42. The stock was trading at $15.73 at RCR Wireless News press time.
