AT&T spun shares of Time Warner Discovery today - 0.24 shares of WBDWV per T share.
T weight down from 4% to 3% - cost basis down from $24.06 to $17.80
WBDWV now 1% weight with a cost basis of $24.06
I think I'm doing the math right here on the cost-basis for WBDWV. My original T cost basis was $24.06 - so subtracting the implied value of the spinco based on the split ratio means my T cost basis is now $17.80.
That means my unadjusted basis in spinco is $6.26. But it needs to be scaled up by the share count difference - so 6.26/.24 = 24.06
Does that make sense? The value of spinco is set to be equal to pre-spin T - with share number being the adjustment factor, not price?
Feels about right given where both shares are trading today relative to Friday and my cost basis estimates.
I'm not sure when I can actually trade spinco - and don't know if I'll keep it or dump it to buy back to 4%+ in AT&T. The yield on T is a juicy 5.78% and it's in a MUCH BETTER situation than 6 months ago when it yielded the same before the dividend cut and spin announcement.
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