Whatever Happened to my AT&T Shares?

Posted by Bryan Taylor in Dividends, Stock Histories with no response yet

One of the great mysteries of life was created when AT&T split up into Ma Bell and the Baby Bells.  This created a chain reaction of share distributions, splits, take-overs and acquisitions which has created stress and confusion to anyone selling shares in AT&T purchased before January 1, 1983.  At least when Standard Oil broke up into 30 companies back in 1912, they at least had the common sense to do this before the IRS could make life miserable for stockholders.

                Luckily, the number of people who owned the original AT&T shares in 1983 and haven’t sold their shares yet, forcing them to calculate the basis for their original shares is dwindling each year, but those poor, tormented souls still exist.  For this reason, we have put together a worksheet that keeps track of the evolution of AT&T shares since 1983.

                On January 1, 1983, AT&T distributed 1 share in AT&T Corp. (“Ma Bell”) and 0.1 share in each of the seven baby bells. On October 1, 1996, AT&T distributed 0.324084 Lucent Technologies, Inc. to their shareholders. After a two-for-one split on April 5, 1999, Lucent Technologies, Inc. distributed 0.010779 Agere Systems, Inc. Class A and 0.264563 Agere Systems, Inc. Class B to shareholders on June 3, 2002.  Agere Systems, Inc. was acquired by LSI Logic Corp. for 2.16 shares on April 2, 2007 and on May 6, 2014 LSI Corp. was acquired by Avago Technologies for $11.15 in cash per share.  At that point the original AT&T shareholder would have had 0.077098 share LSI Logic Corp. which would have netted him $0.85964 for each original share that he held.  I hope I didn’t lose anyone there.

                I don’t know how many people have never sold any of the shares that resulted from the break-up of AT&T, but what happened to those shares would befuddle a member of Mensa.  To help those who were given 100 shares of the original AT&T for their Bar Mitzvah in 1982 and they never bothered with what happened after that and now realize that keeping track of all the changes in their shares would be a more difficult task than the labors of Hercules, we have put together a spreadsheet that will enable them to figure out the net result of 30 years of inaction on their AT&T shares.

                To get straight to the point, according to our calculations, if you held 1 share of AT&T in 1983 before the company was broken up into Ma Bell and the seven Baby Bells, you should currently hold the following (ignoring any cash dividends that were paid along the way): 0.25304479 Alcatel-Lucent S.A., 0.125 NCR Corp., 0.125 Teradata Corp., 3.14472 Comcast Corp., 1.644525 Verizon, 0.4772727 Vodafone plc, 6.0785677 AT&T Inc., 0.1151035 CenturyLink Inc., and $16.27 in cash.

                The interesting thing about this result is that only two of the original Ma Bell and Baby Bells have survived, and they have both changed their names. Bell Atlantic changed its name to Verizon Communications, Inc. on June 30, 2000 and SBC Communications changed its name to AT&T Inc. when it acquired the original Ma Bell, AT&T Corp., on November 18, 2005 in a reverse acquisition.

                All total, there have been 58 corporate actions involving Ma Bell, the Baby Bells and all the companies that either were spun off or was involved in an acquisition of the ever-growing AT&T chain letter.  We could provide a list of all of these changes, but rather than driving yourself insane by trying to keep track of all them, it is probably best if you consult the AT&T Worksheet we have put together.  This shows at each point in time from January 1, 1983 to 2014 how each corporate action would have affected your holdings of AT&T and its progeny.

                Of course, if you were smart, you would have sold your AT&T the day the break-up was announced, but if you are a glutton for punishment and held onto your shares over the past thirty-two years, I hope the accompanying worksheet will reduce your agony.

 

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