Almost a year ago, AT&T (T) announced it would be spinning off its Warner Media division. As part of the spinoff, Warner Media merged with Discovery to form a new company, Warner Bros. Discovery (WBD). As a result, T shareholders received 0.24 shares in WBD for each share of T held. When the spinoff was announced I wrote a blogpost with my thoughts on the spinoff. You can check it out by clicking the link below.
The Plan
Now that the spinoff has occurred, I have 53 shares of WBD. I also still hold all of my T shares. My plan is to continue to hold both positions for now. As part of my plan, I am considering adding to my position in WBD. As someone who invests for dividends, it can be hard for me to hold positions that do not pay dividends. The reason I am considering adding to my WBD position is to get to 100 shares in order to sell covered calls. By selling covered calls on WBD I could create my own “dividend” by collecting option premium.
Executing the Plan
In order to execute my plan and add to my WBD I will need to free up some cash. Most of my cash is tied up in options trade. If I can free up some cash in a timely fashion and WBD is at what I would consider a fair value I will add to the position. If the stock price of WBD runs up, I may change my mind and exit my position at a profit. Time will tell which direction I will go.
As stated above, I plan to continue to hold my positions in T and WBD. This is inline with my thoughts when the spinoff was announced. How have you handled the spinoff? I would be interested to know others have dealt with the spinoff.
*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence or consider seeking the advice of a financial and/or tax professional.
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I sold my WBD and put the money into T.
Was this your plan from when the spinoff was announced?