Why AT&T Shares Are Falling Today

AT&T Inc (NYSE: T) is trading lower Tuesday morning after the company announced it will spin off its interest in WarnerMedia to its shareholders at the closing of the previously announced transaction with Discovery Inc (NASDAQ: DISCA).

AT&T will spin off 100% of its interest in WarnerMedia in a pro rata distribution to shareholders. The transaction is expected to close in the second quarter.

Additionally, AT&T’s board approved an expected post-close annual dividend of $1.11 per share to account for the distribution of WarnerMedia to AT&T shareholders and to size the annual dividend payout at approximately 40% of projected free cash flow, which the company said will enable investments in attractive growth opportunities.

"In evaluating the form of distribution, we were guided by one objective — executing the transaction in the most seamless manner possible to support long-term value generation," said John Stankey, CEO of AT&T.

Stankey continued, "We are confident the spin-off achieves that objective because it’s simple, efficient and results in AT&T shareholders owning shares of both companies, each of which will have the ability to drive better returns in a manner consistent with their respective market opportunities."

See Also: Why AMC Entertainment Shares Are Trading Higher Today

T Price Action: AT&T has traded as low as $22.02 and as high as $33.88 over a 52-week period.

The stock was down 4.67% at $24.33 at time of publication.

Photo: courtesy of AT&T.