Levin
Shares of the newly merged AOL Time Warner ended their first day of trading lower, easing 1.6% to close at $46.47 and exhibiting yet again Wall Street's propensity to "buy on rumors, sell on news."
After a tough year in 2000, stocks of both AOL and Time Warner surged in recent days in anticipation of the Federal Communications Commission greenlighting their merger. That happened Thursday night. The stock fell Friday as investors faced the reality of the enormous integration that must take place during a slowing economy and soft ad market.
CEO Gerald Levin and co-chief operating officer Bob Pittman were on hand at the New York Stock Exchange to ring the opening bell.
Pittman insisted advertising "doesn't slow for everyone" in a downturn but that advertisers consolidate their business with big players who can deliver the most. He and Levin noted that less than a quarter of AOL Time Warner's combined revenue comes from advertising.
Execs said the company remains committed to its previously estimated $1 billion in cost savings and is sticking by its financial growth targets. It will explore the numbers in detail and discuss synergies at an analysts' meeting later this month."Our brands, services and technologies already touch hundreds of millions of people, and by closely integrating our assets, we will embed the AOL Time Warner experience more deeply into their everyday lives," said Steve Case, chairman of the new conglom -- the first major combination of old and new media.
AOL Time Warner also announced its new 16-member board of directors, split evenly between reps from both companies. The list includes Case, Levin, Pittman and Pittman's co-chief operating officer, Richard Parsons, along with Kenneth Novack, vice chairman of AOL Time Warner; Ted Turner, company vice chairman and senior adviser; Reuben Mark, chairman-CEO of Colgate-Palmolive; Michael Miles, former chairman of Philip Morris Cos.; Franklin Raines, chairman of Fannie Mae; and Stephen Bollenbach, president-CEO of Hilton Hotels.
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