Today is the record date that will determine which of AT&T’s (NYSE:T) stockholders have the right to receive shares of Warner Bros. Discovery. The latter company will trade on the Nasdaq under the symbol WBD. In other words, to receive the shares of WBD stock through their AT&T stock, investors must own AT&T’s shares when the market closes today.
The eligible owners of T stock will have the right to receive 0.24 shares of WBD stock for each share of AT&T that they own. This transaction is expected to be completed between April 12 and the end of the month.
What Is WBD Stock?
But where does WBD even come from?
Well, AT&T is spinning off Warner Media, which will combine with Discovery (NASDAQ:DISCA) to form Warner Bros. Discovery.
Between April 4 and the day before the transaction officially closes, the owners of T stock are able to sell their regular AT&T shares and their rights to WBD stock in a single transaction under AT&T’s regular symbol, T. Such a transaction is called a sale “in the regular way market.”
Alternatively, shareholders can sell just their T stock and keep their rights to WBD stock during this time, through a sale “in the ex-distribution market under the temporary NYSE symbol ‘T WD.’” Finally, the owners of T stock can unload only their rights to WBD stock using “the temporary Nasdaq symbol ‘WBDWV.’”
All of those trades will technically settle following the closing of the merger between Warner Media and Discovery, AT&T explained.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.