Investors in Discovery Communications had both an up and down Thursday in the stock market, as the basic-cable networks’ C-class shares rose $3.20 each to close at $16 while the company’s A-class share fell $4.49 to close at $13.81. The C-class shares are new.
That divergence is from a rebalancing related to a new Discovery C-class stock reflecting 100% ownership of the company, while a prior incarnation represented just two-thirds ownership. One-third owner Advance/Newhouse Communications rolled its stake in Discovery Communications.
The imbalance, which is unusual, was attributed to the Russell 1000 Index removing A-class shares and replacing them with C-class shares.
“This was also the apparent cause of the close imbalance as indexers swapped out of class-A shares into class-C shares,” a Merrill Lynch update to investors said. Usually, different classes of stock from the same company move in the same direction.”
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