On May 17, 2021, AT&T announced an upcoming deal to merge its WarnerMedia media division with Discovery and the dividend cut. Those days, AT&T's price dropped by about 8%. Last week, the deal was completed, forming another major competitor among the streaming services such as Netflix, Disney and Amazon. Following this news AT&T's price fell considerably by 19%, as the market repriced the shares in accordance with the company's asset losses.
Experts point out that the the media service spinoff into a separate company will allow AT&T to focus on its core telecommunications business, including 5G networks and fiber optic laying.
The spinoff of AT&T's media business has raised more than $40 billion, which management will undoubtedly use to address its huge debts. Investors will get an update on AT&T's financial performance in the Q1 2022 earnings report, but the company's debt is already expected to start shrinking. We'll be watching for further developments in the company and the dynamics of its value in the market.