Why Is AT&T (T) Stock Up Today?

One stock that is trending higher today is AT&T (NYSE:T) as investors anticipate an upcoming merger. Currently, T stock is up approximately 2% in afternoon trading.

AT&T (T) logo on wooden background
Source: Lester Balajadia / Shutterstock.com

Recently, AT&T has been on investors’ radar more so than usual. That’s because AT&T is a large stakeholder in WarnerMedia (NASDAQ:WBDWV), a company that’s undertaking a key merger. WarnerMedia and Discovery (NASDAQ:DISCA) will merge into Warner Bros. Discovery, which will trade under the ticker symbol WBD.

This highly anticipated merger was expected to be completed as early as today. However, it looks as though this merger will likely be completed on Monday, April 11, when it was originally scheduled.

So, what does AT&T have to do with this merger? Let’s dive in.

T Stock Surges Higher Ahead of Key Merger

The upcoming merger between these two media giants involves AT&T in a big way. That’s because AT&T happens to be a large shareholder in WarnerMedia. Upon completion of the merger, AT&T shareholders will receive a special dividend. This share dividend will result in AT&T stockholders receiving a 71% stake in the merged entity.

Thus, for investors looking at AT&T stock as just a simple telecom play, it’s more than that. This is a two-for-one sort of deal, one that allows investors to gain upside to this merger, while retaining an interest to the company’s core business.

On its own, AT&T is an intriguing long-term cash flow growth play, providing significant dividend income to investors. Often viewed as a bond proxy, this company falls into the rather “uneventful” bucket for most investors. However, this upcoming merger has certainly brought some spark back into the discussion around T stock.

On the date of publication, Chris MacDonald 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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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