Quote:
Originally Posted by rde3036
The price of AT&T has not fallen below 20 since 1995.
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From a CNET news story published Aug 10, 2002
"AT&T plans to offer a 1-for-5 reverse stock split following its proposed merger with Comcast, the company revealed in a regulatory filing Wednesday.
The statement, filed with the Securities and Exchange Commission, details issues that will be voted on at the next shareholder meeting, including specifics on a new business structure and further details on the Comcast merger. The meeting has not yet been scheduled but is expected to take place sometime this year.
AT&T proposed the reverse split to "adjust the trading prices of AT&T common stock following the various transactions to effect AT&T's restructuring plan, including the AT&T Comcast transaction," the company said in the SEC document.
Both companies recommend that shareholders vote in favor of the proposed merger of AT&T Broadband, AT&T's cable arm, and Comcast. The new company, to be called AT&T Comcast Corporation, may encounter regulatory difficulties. The merger would create a cable giant with over 21 million subscribers, which has caught the eyes of antitrust regulators .
Reverse stock splits have been typically used to pump up the value of stocks that are in danger of falling below the $1 limit necessary for listing on the Nasdaq. But AT&T's shares currently trade at around $14.47 a share. The reason the company opted for the 1-to-5 reverse split, according to analysts, was that once the AT&T-Comcast deal is complete,
the remaining value of AT&T shares are only expected to be around $4.50."
Boldface by me for emphasis. I repeat, the reverse split does not show up in any historical stock price chart, probably because technically it never happened. Sure, the day after the split the shares were once again over $20, but I had 200 shares instead of 1000 shares.