After more than a year in the works, the big merger between Twenty-First Century Fox or "21CF" (NASDAQ: TFCF) (NASDAQ: TFCFA), and Walt Disney (NYSE:DIS) has finally arrived. This morning, shares of "New Fox," officially called Fox Corporation (NASDAQ:FOXA) (NASDAQ:FOX) began trading under 21CF's old ticker following its separation from 21CF at 8:00 AM.
That spinoff means that approximately 26% of 21CF shares will go to New Fox, while the remaining 74% of the stock will be acquired by Disney at 12:02 a.m. EDT on March 20, or overnight tonight. The spinoff created some chaos on the markets as different outlets reported 21CF stock was down by different amounts.
Based on 21CF's adjusted closing price last night, New Fox shares were down 3.7% as of 11:36 a.m. EDT. 21CF, which is in its last day of trading, as it will stop trading after Disney acquires the rest of its shares overnight, was up 0.3%. Disney shares were basically unchanged, up 0.1%, as they were unaffected by the current leg of the deal.
The confusion about the stock among the different media outlets seems to have been caused by New Fox taking 21CF's old tickers, FOX and FOXA. 21CF is now trading under the tickers TFCF and TFCFA. Though some outlets are reporting FOX and FOXA are down 22%, that is not correct. It just seems like that because New Fox is under the same ticker.
Of the 26% of 21CF that New Fox got, New Fox shareholders received about 1.26 shares for each single share of 21CF, which explains why the FOX and FOXA tickers are trading about 22% lower than yesterday. Based on the distribution agreement, shares of New Fox are worth about 22% less than shares of 21CF.
New Fox also announced its slate of directors today, which included former speaker of the House Paul Ryan as well as previously announced members of the Murdoch family. Lachlan Murdoch will service as CEO and chairman of New Fox, which will retain control of the Fox Broadcasting Network and affiliates as well as Fox News and Fox Sports.
Investors can expect more confusion tomorrow when Disney absorbs the rest of the 21CF stock.