In Jan 1,1984, if someone owned 25 shares each of the 7 "baby bells",
what would those stocks look like today?

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Request for Question Clarification by websearcher-ga on 13 Jun 2003 10:06 PDT

Hello otter4:

Thanks for the challenging question. 

According to my research, there have been at least 36 cost basis
adjustments for spin-offs and 24 stock splits in the 7 baby bells
(+AT&T) since 01/01/94. To compute the exact worth of any number of
stocks in the 7 "babies" would be extremely cumbersome.

I have, however, found an existing piece of software designed
specifically to do this type of calculation for you. It allows you to
"what if" scenarios with any number of stocks from the original 8
companies bought at any date.

This program costs approximately US$100. Would a link to this program
be sufficient for an answer? I would recommend that if it is, you
lower the value of this question to a more "reasonable level" for the
amount of work I've put in, then let me know (through a Clarification)
that you want to investigate the product I've found. I'll then answer
the question with details of how to get the product in question.

How's that sound? 

Thanks. 

websearcher-ga

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Clarification of Question by otter4-ga on 13 Jun 2003 17:10 PDT

Thanks for your reply.  At this point I'm not sure whether or not to
proceed.  I have left a message on my sister's answering machine with
regard to the necessity of the answer to my question.  If it's very
important, I will increase the price and ask you to do the research. 
Perhaps this decision will be in limbo for the next 24 hours.

Hello.

The seven "Baby Bells" were BellSouth, NYNEX, Bell Atlantic, U.S.
West, Southwestern Bell, Ameritech, and Pacific Telesis.  Several of
these companies have merged.

If standard elections were taken in every merger or spinoff involving
these companies, ownership of 25 shares of each of the Baby Bells
would result in  ownership today of the following stock porfolio:

BellSouth (BLS): 450 shares (value: $11,934.00)
Verizon (VZ): 353.6 shares (value: $13,949.52)
SBC: 841.09 shares (value: $21,296.40)
Vodafone (VOD): 250 shares (value: $5,120.00)
Qwest (Q): 177.65 shares (value: $868.71)
AT&T Wireless (AWE): 30.571 shares (value: $229.59) 
Comcast (CMCSA): 30.7325 shares  (value: $1,033.53)
AT&T (T): 19 shares (value: $396.34).

For purposes of precision, I have included fractional shares of some
of these various stocks. In reality, it is sometimes required that
fractional shares be converted into cash at the time of a merger or
spinoff. The impact on our results is minimal, though, as a fraction
of share is usually only worth a few dollars.

Stock values are based on closing prices for Friday, June 13, 2003. 
Source: Yahoo Finance:
http://finance.yahoo.com/q?s=bls+vz+sbc+vod+q+awe+cmcsa+t&d=t


------------------------------
Computation & Analysis
------------------------------

BELLSOUTH

1984 25 shares
splits:
1984 3-for-1 : 75 shares
1987 3-for-2 : 112.5 shares
1995 2-for-1 : 225 shares
1998 2-for-1 : 450 shares
There have been no splits since 1998.

source: BellSouth Stock Split History
http://www.bellsouth.com/investor/ir_stockdiv_split_history.html


-----------------------------------------

Bell Atlantic and NYNEX

NYNEX merged into Bell Atlantic in 1997. In turn Bell Atlantic merged
into Verizon in 2000.

BellAtlantic
1984 25 shares
splits
1986 2-for-1: 50 shares
1990 2-for-1: 100 shares
1998 2-for-1: 200 shares
source: Investor.verizon.com
http://investor.verizon.com/shareowner/vz_cost_basis.pdf

NYNEX
1984 25 shares
1986 2-for-1: 50 shares
1993 2-for-1: 100 shares
merger: 0.768 Bell Atlantic for 1 NYNEX : 76.8 shares
1998: 2-for-1: 153.6 Bell Atlantic shares
source: Investor.verizon.com
http://investor.verizon.com/shareowner/vz_cost_basis.pdf

Thus, by 1998, the NYNEX and Bell Atlantic investments would have
given the investor a combined 353.6 Bell Atlantic shares (i.e., 153.6
from NYNEX and 200 from the original Bell Altantic). In 2000, Bell
Atlantic changed its name to Verizon.  There have been no splits since
then, so the owner would currently have 353.6 Verizon shares.


-----------------------------------------

SOUTHWESTERN BELL, PACIFIC TELESIS, AMERITECH

Today, these three companies form SBC.

Let's take them one at a time.

Southwestern Bell (later renamed SBC)
1984 25 shares
splits
1987 3-for-1: 75 shares
1993 2-for-1: 150 shares
1998 2-for-1: 300 shares
source: sbc.com
http://www.sbc.com/investor_relations/shareowner_services/cost_basis_guide_and_calculator/0,5931,14,00.html

Pacific Telesis
1984 25 shares
splits
1986 2-for-1: 50 shares
1987 2-for-1: 100 shares
1997 merger: 0.73145 SBC shares for 1 PacTel : 73.145 SBC shares
1998 2-for-1: 146.29 SBC shares
source: sbc.com
http://www.sbc.com/investor_relations/shareowner_services/cost_basis_guide_and_calculator/0,5931,14,00.html
http://www.sbc.com/investor_relations/0,5931,57,00.html

In 1994, a company called AirTouch was spun off from Pacific Telesis.
For every one share owned of Pacific Telesis, a shareholder received
one share of AirTouch.  In this example, 100 shares of AirTouch common
stock would have been received. In 1999, AirTouch merged with
Vodafone.  For every 1 share of AirTouch owned, 0.5 shares of Vodafone
plus $9 was received.
Thus,
1994: 100 shares AirTouch
1999: 50 shares Vodafone, plus $900 cash
1999: 5-for-1 stock split: 250 shares Vodafone

sources: Vodafone
http://www.vodafone.com/article/0,3029,CATEGORY_ID%253D406%2526LANGUAGE_ID%253D0%2526CONTENT_ID%253D20132,00.html
http://www.vodafone.com/article/0,3029,CATEGORY_ID%253D41002%2526LANGUAGE_ID%253D0%2526CONTENT_ID%253D10113,00.html


Ameritech
1984 25 shares
splits
1987 3-for-2: 37.5 shares
1989 2-for-1: 75 shares
1994 2-for-1: 150 shares
1998 2-for-1: 300 shares
1999 merger: 1.316 SBC shares for 1 Ameritech : 394.8 SBC shares
source: sbc.com
http://www.sbc.com/investor_relations/shareowner_services/cost_basis_guide_and_calculator/0,5931,14,00.html
http://www.sbc.com/investor_relations/0,5931,59,00.html

Thus, from these three companies, there would be a combined 841.09 SBC
shares (i.e., 394.8 from Ameritech, plus 146.29 from Pacific Telesis,
plus 300 from Southwestern Bell).

Additionally, as mentioned,  250 shares of Vodafone would have
resulted from the spinoff of AirTouch from Pacific Telesis.



--------------------------------------------

U.S. WEST


U.S. West
1984 25 shares
splits
1986: 2-for-1: 50 shares U.S. West
1990: 2-for-1: 100 shares U.S. West
1998: Issuance of 0.02731 of U.S. West shares for every 1 Media Group
share (see below); now a total of 102.731 U.S. West shares
2000: U.S. West merges with Qwest; 1.72932 of Qwest shares issued for
every 1 share of U.S. West; Result: 177.65 shares of Qwest
source: qwest.com stock history
http://www.qwest.com/about/investor/stock/history.html

MediaOne spinoff
1995: Distribution of 1 share of Media Group stock for every U.S. West
share; 100 shares Media Group; Media Group later changes its name to
"MediaOne"

2000: MediaOne merges with AT&T; Standard election: For every one
share of MediaOne 0.95 shares of AT&T common stock plus $36.27 cash. 
Thus, here you'd receive 95 shares of AT&T plus $3627.

2001: AT&T wireless spinoff; Investor receives 0.3218 AT&T wireless
shares for every AT&T share; Thus, owning 95 AT&T shares will result
in 30.571 AT&T wireless shares.

2002: AT&T broadband spinoff: Investor receives 1 AT&T Broadband share
for every 1 AT&T share. Thus, 95 AT&T Broadband shares would be
received here.

2002: AT&T Broadband merges with Comcast at ratio of 0.3235 Comcast
shares for every 1 AT&T Broadband shares. Thus, 95 AT&T Broadband
shares would result in 30.7325 Comcast shares.

2002: AT&T 1-for-5 reverse split; Every 5 shares of AT&T common stock
are converted into a single share of AT&T common stock.  Here, 19
shares of AT&T common stock would be received.

sources: qwest.com stock history
http://www.qwest.com/about/investor/stock/history.html
AT&T MediaOne Merger
http://www.att.com/ir/pdf/mediaone_taxbasis.pdf
AT&T stock events
http://www.att.com/ir/ss/tbi/reorgbknd.html 

 
--------------------------

Since your question asks what the stocks would look like today, I'm
assuming that your focus is on how many shares of different companies
the 7 Baby Bells would have become as a result of many splits and
mergers. I hope that I've provided that information in a clear
fashion.

Your question doesn't mention dividends, so I'm assuming that you
don't need information on the various cash dividends that were
regularly paid out on these stocks over the course of the last 20
years. There are a few web sites out there that talk about various
Baby Bell historical returns and include "dividend reinvestment"
(i.e., the idea that cash dividends could have been used to buy more
shares). Most investors do not participate in dividend reinvestment,
so I'm assuming that dividend reinvestment information was not part of
your question. If that's not the case, let me know.

search terms: 
(various) "Baby bells"
sbc, pacific telesis, ameritech, stock, basis
bellsouth, stock, history basis
mediaone, at&t, basis merger
qwest, "u.s. west"
vodafone, airtouch, pacific
nynex, "Bell atlantic", verizon, stock history, basis


I hope this answers your question. If anything is unclear, please use
the "request clarification" feature.

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Request for Answer Clarification by otter4-ga on 18 Jun 2003 12:54 PDT

Dear juggler-ga,  thanks for the great answer!  Can I pay you an
additional fee to get the same answer using 763 shares of ATT stock
with the starting date of 1/1/84 and reinvesting the dividends?  I
need the info asap.

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Clarification of Answer by juggler-ga on 18 Jun 2003 14:00 PDT

Hi otter4,

I'll give it a try.

Just to make sure that I understand the question...

When you say "ATT stock with the starting date of 1/1/84," would I be
correct in assuming that you mean the post-breakup AT&T (not including
the baby bells)?

Also, am I to calculate dividend reinvestment in just the main AT&T
common stock?  Or do you also need dividend reinvestment calculations
on AT&T spinoff companies such as Lucent?

Thanks.

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Request for Answer Clarification by otter4-ga on 18 Jun 2003 16:37 PDT

Dear juggler-ga, Stay with me here I'm feeling hopeful...No, do not
assume that. Start with the date of Dec.31,1983, before the
divestiture.  Yes, calculate dividend reinvestments and spin offs such
as Lucent (and its spinoffs) and all the other stock events of ATT to
the present.  and then it's like redoing that other question I first
asked about only 25 shares each of the "baby bells"  Now it's like 76
shares each.  Oh my head is swimming...am I making sense?  Don't
answer that.  Thanks otter4

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Clarification of Answer by juggler-ga on 18 Jun 2003 17:34 PDT

Hi otter4,

The dividend reinvestment calculations could turn this into a pretty
massive project. The problem with calculating dividend reinvestment is
that you need to know not only the dividend that was paid but also the
stock price on the day the dividend was paid.  For some of the baby
bells, I might be able to locate this information or perhaps some
figures that someone else has already calculated, but I have a hunch
that there could be some pretty major gaps.

Some of the baby bells such as Pacific Telesis have been defunct for
several years and information about their history is harder to come
by.

Also, there are issues having to do with the costs of dividend
reinvestment.
In reality, dividend reinvestment sometimes involves commissions or
fees. Logically, the costs of dividend reinvestment should be
included. However,  I'm not sure if I'll be able to find this
information, especially for Baby Bells that no longer exist.

I guess I'm somewhat resistant to the idea of doing a massive amount
of additional work on this, and, at the end, not really being able to
come up with a complete answer.

I'm fairly confident that I can do a calculation of what 763 shares of
AT&T would be worth today NOT including dividend reinvestment.  I
could also probably figure out total cash dividends on the various
stocks for a certain period such as, say, the last three years. Would
this be enough?  I'm hesitant to promise more.

Also, if you'll forgive my asking, how much compensation do you have
in mind?

Thanks.
juggler

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Request for Answer Clarification by otter4-ga on 18 Jun 2003 22:43 PDT

dear juggler-ga, if $ 200.00 doesn't seem like enough I could add a
tip of up to $ 100.00. I really want to do what is fair but have no
idea what this is worth.  I need some idea if that's reasonable or way
off base.  Perhaps take the dividend reinvestments of the 763 ATT
shares starting in the 90's up to today.  just take the 76 shares each
of the baby's back to the 90's too.  if that is too much... start at
'95.  Whatever seems do-able to you.  Can dividend reinvestment make a
huge difference in the final number of shares or not?  Could it double
or triple the final number of shares?  Or could it be like 20% maybe? 
Is there a way to do an educated guess?  this all also assumes one has
calculated the shares of the spin offs and splits and mergers, etc. 
But don't do dividend reinvestments with those.  I'll check with you
in the morning 6-19.  thanks so much, otter4

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Clarification of Answer by juggler-ga on 19 Jun 2003 01:19 PDT

Hi.

Well, this will be quite a bit of work for me, and I'm still not sure
how long it will take.  The tipping feature only goes up to $100, so
if I were to post the additional information in this section, you'd be
limited to that amount.  You could post a new question, though, and I
could provide the information as an answer to that new question.

------

Here's a sample for one stock, BellSouth. Good information is
available for this company, so I started with an easy one.


Let me know if this is basically acceptable.


According to a web page that I found, 10 BellSouth shares in 1984 =
282.5042 BellSouth shares in late 1999 using a method that apparently
includes dividend reinvestment.

Using that ratio, 76 BellSouth shares in 1984 would equal 2147.03
BellSouth shares in 1999.

Okay, so let's go from there...

BellSouth dividends
http://investor.bellsouth.com/ireye/ir_site.zhtml?ticker=BLS&script=1700
BellSouth historical stock price lookup
http://investor.bellsouth.com/ireye/ir_site.zhtml?ticker=bls&script=340&item_id=bls

date         dividend           / stock price           / shares
purchased
11/1/1999 (div 0.19)  $ 407.94 / stock price 47.1875 / shares
purchased 8.645
2/1/2000  (div 0.19)  $ 407.94 / 45.9375 / 8.88
5/1/2000  (div 0.19)  $ 407.94 / 48.8125 / 8.357
8/1/2000  (div 0.19)  $ 407.94 / 39.9375 / 10.214
11/1/2000 (div 0.19)  $ 407.94 / 46.9375 / 8.691
2/1/2001  (div 0.19)  $ 407.94 / 43.00 / 9.487
5/1/2001  (div 0.19)  $ 407.94 / 42.73 / 9.547
8/1/2001  (div 0.19)  $ 407.94 / 41.38 / 9.858
11/1/2001 (div 0.19)  $ 407.94 / 37.7 / 10.82
2/1/2002  (div 0.19)  $ 407.94 / 39.2 / 10.407
5/1/2002  (div 0.19)  $ 407.94 / 31.69 / 12.87
8/1/2002 (div 0.20)   $ 429.41 / 25.86 / 16.605
11/1/2002  (div 0.20) $ 429.41 / 27.27 / 15.747
2/1/2003  (div 0.20)  $ 429.41 / 23.8 / 18.042
5/1/2003 (div 0.21)   $ 450.88 / 25.38 / 17.765
 Total
Dividends since 11/99 = $ 6,226.45 / Total shares purchased through
reinvestment since 11/99: 175.935

Total shares: 2147.03 + 175.935 = 2322.965 .

2322.965 BellSouth shares @ today's price of $26.79 would be worth
$62,232.23.

So basically, here's a partial answer to your questions about the
actual effect of dividend reinvestment since 1984.  If there had been
no dividend reinvestment, the 76 original shares BellSouth would have
grown to 1368 shares through splits. With dividend reinvestment, the
total number of shares is 2322.965, which is about 70% higher.

-------------

How does this look?

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Clarification of Answer by juggler-ga on 19 Jun 2003 02:47 PDT

Hi Otter,

I've been working some more on the question, and I just wanted to let
you know that there's a slight problem with my BellSouth sample. I
didn't include compounding (i.e., the dividends would actually by
increasing each period because of the additional shares bought).  It's
getting late where I'm at, so I can't recalculate it tonight, but I
will do so later today (6/19). Thanks.

---

Clarification of Answer by juggler-ga on 19 Jun 2003 02:49 PDT

That should have read" "...dividends would actually be increasing..."  

I need some sleep. :)

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Clarification of Answer by juggler-ga on 19 Jun 2003 11:04 PDT

Okay, I used a spreadsheet to calculate dividend reinvestment on
BellSouth with compounding.

I hope this pastes correctly:

date    shares          rate    dividend        price      purchased
11/99	2147.03	        0.19	407.9357	47.1875	8.6449949669
02/00	2155.674995	0.19	409.57824904	45.9375	8.9159890948
05/00	2164.5909841	0.19	411.27228697	48.8125	8.425552614
08/00	2173.0165367	0.19	412.87314197	39.9375	10.337981646
11/00	2183.3545183	0.19	414.83735848	46.9375	8.8380795415
2/01	2192.1925979	0.19	416.51659359	43	9.6864324092
05/01	2201.8790303	0.19	418.35701575	42.73	9.7907094723
08/01	2211.6697397	0.19	420.21725055	41.38	10.15508097
11/01	2221.8248207	0.19	422.14671594	37.7	11.197525622
02/02	2233.0223463	0.19	424.2742458	39.2	10.823322597
05/02	2243.8456689	0.19	426.3306771	31.69	13.453161158
08/02	2257.2988301	0.2	451.45976602	25.86	17.457840913
11/02	2274.756671	0.2	454.9513342	27.27	16.683217242
02/03	2291.4398882	0.2	458.28797765	23.8	19.25579738
05/03	2310.6956856	0.21	485.24609398	25.38	19.119231441


total shares: 2329.8149171

Thus, compounding results in about 7 more shares.

Great computer manners, prompt and most helpful.

A related question that reiterates websearcher's point ...

STOCK MARKET
http://answers.google.com/answers/main?cmd=threadview&id=191398

-K~

Hi Otter4,
Thank you very much for the tip.
-juggler