Fool.com: A New AT&T Offspring Is Born [Breakfast With the Fool] April 27, 2000

"I like players to be married and in debt. That's the way you motivate them."
-- Ernie Banks, American baseball coach

BREAKFAST WITH THE FOOL
A New AT&T Offspring Is Born

By Richard McCaffery (TMF Gibson)
April 27, 2000

Telecommunications giant AT&T (NYSE: T) priced the shares of its much-awaited wireless tracking stock at $29.50 last night, raising $10.6 billion in the biggest U.S. initial public offering ever.

The company will issue 360 million shares of AT&T Wireless (NYSE: AWE), a tracking stock that gives investors an economic interest but not an ownership stake in the company, the third-largest wireless company in the U.S.

A few relevant facts on the wireless tracker and AT&T's plans:

  • The shares being sold represent 15.6% of the company (17.5% if the underwriters fully exercise the over-allotment option).
  • With 2.3 billion total shares outstanding, the company will have a market cap of $68.1 billion.
  • Of the 360 million shares being issued, 10% have been reserved for employees.
  • AT&T plans to sell its remaining interest in the stake, including a piece in the second half of this year.
  • AT&T shareholders will receive a portion of the shares in the form of a stock dividend. The amount and time haven't been determined.
  • The wireless group had $7.6 billion in revenues last year and reported a net loss of $405 million.
For more on the story, check out these Foolish articles:
The Right Track on Tracking Stocks
AT&T Readies Wireless Wonder
A Wireless Whirlwind

News to Go

Bank holding company Bank of America (NYSE: BAC) has taken a 16% stake in electronic bill payment company CheckFree (Nasdaq: CKFR) as part of a strategic agreement that has CheckFree buying the giant bank's electronic billing and payment assets. Bank of America has about 700,000 customers enrolled in its online payment services program, and about 300,000 are expected to be added to CheckFree's 3.3 million subscriber base.

Imaging products company Xerox (NYSE: XRX) and Microsoft (Nasdaq: MSFT) are expected to announce plans to launch a jointly owned company that will offer Internet products and services, The Wall Street Journal reported. Xerox is expected to have majority control of the venture, which will offer, for example, products for protecting intellectual property on the Internet.

Cellular phone maker Nokia (NYSE: NOK) said first-quarter profits soared 76% to $820 million as sales grew 69% and operating profit grew 71%. "Based on current market conditions and our globally strong position, we are confident we can achieve full-year revenue growth at, or higher than, the earlier stated 30 - 40% range, combined with continued strong profitability," said Jorma Ollila, Nokia chairman and CEO.

Tricon Global Restaurants (NYSE: YUM), operator of the Taco Bell, KFC, and Pizza Hut franchises, reported first-quarter earnings of $96 million, or $0.64 per share, compared with earnings of $81 million, or $0.50 per share, a year ago. Growth came from international expansion and reductions in operating costs. The company beat estimates by $0.09 per share.

More Foolishness

Fools debate whether the accessibility provided by online trading is a good thing... FoolU explains the trick to asset allocation... Eyes on the Wise takes a look at the earnings estimates game.