Time Warner set to spin off AOL
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Time Warner said that it will spin off its internet business, AOL, as a separate company on 9 December.
On that date, Time Warner shareholders of record as of 27 November will receive one share of AOL common stock for every 11 shares of Time Warner common stock they hold, the media company said.
AOL said in a Monday regulatory filing that it will start out with about 105.7 million common shares, based on the amount of shares of Time Warner stock it expects to be outstanding as of 27 November.
Based on Time Warner's closing stock price of $32.35 (£19.24) on Monday, AOL is currently worth about $3.4 billion (£2.02 billion).
That is a fraction of the $20 billion (£11.9 billion) that longtime advertising partner Google valued it at in 2005 when it bought a 5 per cent stake in the company for $1 billion (£594 million).
It is also much lower than what Time Warner valued AOL at in July when it bought back Google's investment for $283 million (£168 million) - this signified AOL was worth less than $5.66 billion (£3.36 billion) when excluding an unspecified cash distribution that was included in the total price.
Time Warner was initially purchased by AOL in 2001. The media conglomerate said in May that it planned to spin off the business by the end of the year after years of trying unsuccessfully to integrate the two companies.
AOL's internet access business has long been fading, while efforts to derive more revenue from online advertising have encountered difficulties.
AOL is based in New York and has major operations in Northern Virginia.
It has about 6,900 employees, though the company is expected to announce a large restructuring plan as it separates from Time Warner, which could lead to numerous job cuts.
AOL shares will start trading regularly on the New York Stock Exchange on 10 December under the ticker "AOL."
Prior to that, shareholders will be able to trade stock on a "when-issued" basis starting 24 November. In this type of trading, stock can be bought and sold but the transactions are not completed until the stock is formally issued.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments