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WorldCom OKs trackers
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June 7, 2001: 2:12 p.m. ET
Firm creating separate tracking stocks for high-growth, traditional operations
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NEW YORK (CNNfn) - Shareholders of WorldCom Inc. approved the creation of two tracking stocks Thursday as No. 2 U.S. long-distance firm moves forward with restructuring plans.
Each share of WorldCom's existing common stock will be split.
WorldCom Group stock, which reflects the performance of the company's high-growth data, Internet and international operations as well as commercial voice services, will trade under "WCOM."
The MCI Group tracker, which will show the performance of its consumer, small business, wholesale long-distance, wireless messaging and dial-up Internet operations, will trade under "MCIT." The split is effective at the close of Nasdaq trading Thursday and the new shares will begin trading Friday.
"The new structure is designed to create greater shareholder value by providing two distinct, clear and compelling investment opportunities, while serving customer needs with a more efficient operation," WorldCom (WCOM: down $0.15 to $18.22, Research, Estimates) CEO Bernie Ebbers said.
WorldCom plans to pay a quarterly dividend of 60 cents a share on the MCI Group stock but does not foresee paying a dividend for the WorldCom stock, the company said.
Last November, WorldCom announced plans to restructure and split the firm in two. Separation of WorldCom's core data and Internet services from the troubled long-distance telephone unit will allow Wall Street to accurately gauge the performance of each business, analysts have said.
WorldCom, once a Wall Street darling, has seen it shares drop nearly 63 percent from its 52-week high of $49.96. The phone company also failed in its $117.7 billion takeover of Sprint Corp. last summer.
Rival AT&T also is splitting up as both companies wrestle with declines in their core long-distance businesses and weak stock prices. AT&T shares have fallen 42 percent from their year high of $37.25.
Ebbers told shareholders at the annual meeting in Clinton, Miss., that the firm has not held mergers talks with any suitor nor has it been approached, a spokeswoman confirmed.
The MCI tracking stock also does not hail the return of the old MCI, which WorldCom acquired in 1998 for $37 billion. "This is not the old MCI," spokeswoman Mary Catherine Ratts said. "Seventy percent of old MCI resides in the WorldCom tracker. It's a very different MCI." 
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