Q06: How to enter SBC acquiring AT&T?

Here's my tentative solution, but wait for additional comments because I'm not an accountant and, although I own both AT&T and SBC stock, I haven't even glimpsed at a prospectus for this acquisition. You should eventually get a worksheet with details on how to compute your number of new SBC shares and their cost basis.

I'd treat it in Quicken as if it were an acquisition of SBC by AT&T rather than an acquisition of AT&T by SBC.

First I'd enter a stock split of my existing AT&T shares, if any, to reflect the number of new SBC shares received for each share of old AT&T stock. This converts your old AT&T shares to new SBC shares (both under the name/ticker symbol AT&T/T).

Next you *might* have to enter a sale of any fractional new SBC shares that result from the above stock split.

Then I'd enter an acquisition of old SBC stock (ticker SBC) by new SBC (name AT&T, ticker T) probably with 1 share of new SBC per old SBC share.

Finally, I'd organize a group of vigilantes to tar and feather the lawyers and corporate executives who do things like this to us poor slobs :-)

Comments and/or criticism of the above as well as volunteers for the vigilante group are enthusiastically solicited.

Jerry

I have the problem that I owned both. I added the required transactions to have SBC acquire T. Unfortunately, I missed the fact that they would use the T ticker symbol. Now I have the correct number of shares, but they are SBC. Ideas on how to get them to T?

Just enter it as a "Corporate Acquisition" ?

(I know, it wasn't "officially" a corporate acquisition of SBC by AT&T. Officially, it was the other way around or something. But does that matter?)

Garry

Sorry Jerry, you can't. Judge Harold Greene, the guy that started the ball rolling when he broke up Ma Bell, died in 2000. :-)

------------------------------------------------------------ Regards -

- Andrew

I'm just thinking aloud here, though I did a quick test.

Assuming you can return to your state before you entered your corporate acquisition, why not:

1.) Rename AT&T (call it "Old AT&T) 2.) Assign Old AT&T and new ticker, say "XT" (copy T's quotes to "XT") 3.) Have SBC acquire Old AT&T 4.) Rename SBC to AT&T 5.) Assign "new" AT&T the ticker T

If you own SBC only then, with recent Quicken releases anyway, you might be able to just use the Edit Security Detail form to change both the corporate name and ticker symbol. When prompted, copy quotes from ticker symbol SBC to ticker symbol T. On the surface this seems to work properly in Q05 H&B.

Select Investing from the top menu, then Security List, then select your current SBC entry and right-click "Edit" to get the Edit Security Detail form.

If it's not a 1:1 swap of old SBC for new SBC you could then enter a stock split with the proper ratio.

The above, together with some combination of stock splits might work even if you own both AT&T and SBC stock if you have a recent enough Quicken release. It looks like Intuit has made some nice improvements in this area. But they always seem to be reluctant to specify exactly what their algorithms are so it's hard to tell without experimentation whether or not a given technique will work properly.

Anybody with both AT&T and SBC stock care to play around with this and report your results?

Jerry

I was referring to using the name and ticker symbol of the acquired rather than the acquiring company after the merger.

Unless Judge Greene specified that in his will or communicated his wishes to Jennifer Love Hewitt I don't think we can hold him responsible. The guilty parties are alive and at large and I think we should hunt them down :-)

Jerry

Thanks for all the replies to my post!

Going to sbc.com, I found information for share holders -- see below.

AT&T Corp is now AT&T Inc, and SBC won't exisit anymore.

More info here:

In my case, since I only owned SBC (and no shares of the old AT&T), I only need to change the company name and ticker symbol. For owners of old AT&T shares, it's more complicated.

I will experiment later with the suggestions posted and let you know what I find. I want to be sure Quicken doesn't think I sold one thing and bought another because then the reports on return, etc. won't reflect that actual situation. That happened to me recently when Vanguard closed one fund and transfered all the holdings to another fund.

John

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Information for Stockholders Joining AT&T Inc. as a Result of the Acquisition of AT&T Corp.

On Jan. 31, 2005, SBC Communications Inc. ("SBC") announced its historic agreement to acquire AT&T Corp. ("old AT&T"). After the closing of the acquisition, old AT&T became a wholly owned subsidiary of SBC. In recognition of the global importance of the AT&T name, SBC changed its corporate name to AT&T Inc. ("new AT&T"). The acquisition was completed on Nov. 18, 2005.

As a result of the acquisition, each share of old AT&T common stock was converted into .77942 of a share of new AT&T common stock. Since new AT&T does not issue fractional shares, you will receive a check for cash-in-lieu of the new AT&T fractional share that resulted from the conversion of your old AT&T shares. If you are a participant in the DirectSERVICE Investment Program for Stockholders of SBC Communications Inc., fractional shares due participants will be aggregated and held by the plan administrator on behalf of the participants, and the fraction is shown on your account.

Any old AT&T common stock you hold in certificate form must be submitted in order to complete the exchange of the certificated shares. These are certificates that were not exchanged as part of the AT&T 1-for-5 reverse stock split in November 2002. If you hold old AT&T certificated shares, you will receive an Exchange Form with instructions on how to complete the exchange process for the old AT&T certificated shares. No dividend or other distributions declared by the new AT&T board of directors following the acquisition date will be paid on these certificated shares until they are submitted for exchange.

In addition, old AT&T will pay a special cash dividend of $1.30 per share to old AT&T stockholders of record on Nov. 18, 2005. The special dividend will be paid in cash and will be mailed approximately 10 ? 15 business days following the effective date of the acquisition.

If your old AT&T account had only uncertificated shares, those shares have been automatically exchanged for uncertificated new AT&T shares without any further action on your part. You will receive a Transaction Advice from Computershare that shows how many uncertificated shares were automatically credited to your new AT&T account.

If you also hold SBC certificates, do not submit them for exchange. They are still valid certificates, and the shares represented by the SBC certificates will receive any dividends or other distributions declared by the new AT&T board of directors.

If you were enrolled in the AT&T Shareowner Dividend Reinvestment and Stock Purchase Plan (the AT&T Plan), your account has been enrolled in the Computershare DirectSERVICE Investment Program for Stockholders of SBC Communications Inc. (the "SBC Investment Program"). You may view the SBC Investment Program online at

or you may call

1-800-351-7221 to receive a copy of the SBC Investment Program brochure.

I hate to admit defeat, John, but this looks much better than what I proposed.

Steps 1, 2, 4 and 5 are simple and straightforward with the Edit Security Detail form and step 3 is a standard corporate acquisition. Couldn't be much simpler.

Jerry

Oops, perhaps I spoke too soon.

Quicken has the ability to download historical data, including stock prices and splits. I assume it uses the ticker symbol as a key to this information.

The method I proposed (treating it in Quicken as a "reverse" acquisition) preserves the "history" of your holdings under both the "SBC" and "T" ticker symbols whereas your method does not.

I still think your method is simpler and might be the better choice, but what I proposed may have its own advantages.

Further thoughts anyone?

Jerry

I could be wrong, but I do not think that Quicken will be able to properly distinguish between prices for ticker "T" when it was the old AT&T and ticker prices for "T" when it is the new AT&T/SBC. I think internally, Quicken historical prices are stored by ticker; once ticker "T" becomes the new AT&T/SBC, I think all historical price downloads for ticker "T" will get prices for AT&T/SBC, and no historical price downloads will get prices for AT&T (or if they do, they will get properly saved to your renamed ticker "XT").

I haven't actually researched the above, someone with actual experience can correct me if I've got it wrong.

(I wasn't really thinking that your original approach was wrong, or trying to compete with it - I didn't think about it enough - but really addressing Hank's question).

SOLVED! (At least I think so, for my situation.)

Since I only own(ed) SBC, and the acquistion didn't change the number of shares I own or the share price, I took what seems like the easiest path -- I simply changed the security name from SBC to AT&T and changed the ticker symbol. Here are the steps:

Open Security List

-Delete AT&T Inc. (which I'd added yesterday, but didn't do anything with)

-Highlight SBC

-Click Edit

-Change name from SBC to AT&T INC

-Change symbol for SBC to T

-Checkboxes -- no change -- Download asset... checked; Tax free... unchecked; Matched w/online... checked

-Click OK

-A dialog opened about historical prices and I clicked Default which lets Quicken decide what to do

This seems to have worked. I recently moved my SBC stock from one online brokerage account to another account (at the same online brokerage), so historical prices don't mean much for the stock in the current account (since the stock has only been in the current account for about a month).

I'd be most interested to hear what the rest of you think about the path I followed. Did I do the right thing?

John

Given that you own SBC only, I'm pretty sure you nailed it!

Let the group know if you encounter any unanticipated problems.

John,

Not possible to return. Too many transactions and account downloads since then. Right now, I have all the shares under "SBC" and the history under "T"....

To add to the confusion, I download my portfolio prices from Yahoo! Finance each Saturday and "T" now has (and is adding) the wrong prices....

Maybe I can:

1) Update Price History for SBC 2) Rename AT&T & Assign it to new Ticker "OLDT" 3) Delete Price history for "OLDT" to delete "New T" prices 4) Rename SBC to "AT&T, Inc." and ticker "T"...

Look like it might work?

Were there a lot of existing transactions involved in the Quicken Corporate Acquisition? Could you just delete the transactions caused by the Corporate Acquisition, then redo it.

Can you tell what specifcally is happening? "T" prices should now be ex-SBC/now-AT&T prices, shouldn't they? Are the prices you are getting just some arbitrarily incorrect price?

Sounds generally ok to me, but ....

I don't know whether #1 is necessary, but I wonder about it. You say you are not getting good prices for the new company under the "T" symbol. Are you looking for historical prices for the old SBC? I assumed that when the ticker symbol change (SBC to T) became effective that the symbol "T" would retrieve historical prices for what was once SBC prior to Dec 18 (or whenever the deal was completed). But you say you are not getting correct current prices for "T". I'm confused.

In #3, I assume you mean to allow Quicken to delete the prices as part of the ticker-change. If I understand what you did to implement the acquisition, don't your current ticker "T prices represent Old-AT&T up through the acquisition, then New-AT&T since the acquisition? If so, I'd tell Quicken to keep the old "T" prices under the "OLDT" symbol, then just delete the specific OLDT prices since the acquisition.

This would seem to imply that when a company folds (or goes private), their ticker symbol couldn't be used again. Surely a ticker symbol isn't retired once a company stop using it. I would have thought that a ticker symbol would only be used when quotes were being retrieved and hence, quotes in the price history of a security wouldn't be mixed with those of a unrelated company that subsequently used the same ticker symbol.

It appears I missed a unique opportunity to understand how Quicken handles quotes. When the new symbol started being used, did anyone try just changing the SBC ticker symbol to T? Did it work (and was it necessary to rename the old AT&T ticker first)? When you get a quote quicken usually retrieves the prices from several days. What did it produce for the days before SBC started using T?

Mike

I, personally, think that historical ticker prices should accurately reflect past history, i.e. that historical "SBC" prices should continue to be available under "SBC" and that historical "T" prices should continue to be available for old AT&T up to 11/18 and for new AT&T thereafter. A stock split on 11/18 can accurately convert the total value of the old "T" shares to new "T" shares. Any other method is historical revisionism.

I think this is a crucial point in deciding how to record this acquisition and I think we should find out what is actually happening. Unfortunately I fear that different quote servers may handle the situation differently.

Jerry

John, I followed your steps to change SBC to AT&T I was ok until I got to the step Matched w/online, that option is greyed out in my Q2005 so I can't check that box. My SBC is held in a dividend reinvestment plan not at a brokerage firm, could that be the problem, or does it matter if that box is left unchecked? Appreciate your input.

Go to Yahoo Finance and look for a quote for SBC. It returns this: "'SBC' is not a valid ticker symbol. " Same for etrade.com. Nothing for SBC. T reports a history of many years.

One good solution here might be to sell the damned stock since it's done so poorly in recent years!

John