Updated from 10:15 a.m. EST to update reasoning behind lower share prices.
NEW YORK (TheStreet) -- Time Warner (TWX) stock is trading lower Monday after completing its spinoff of Time Inc. (TIME), a unit which will focus solely on its magazines including Sports Illustrated and People. Time Inc. begins trading Monday on the New York Stock Exchange.
By midmorning, shares of Time Warner were 3.2% lower to $68.82, a product of the absence of Time Inc.'s value included in the stock price. As part of the spinoff, Time Warner distributed outstanding shares of Time Inc. common stock to its shareholders at a distribution ratio of one Time Inc. share for every eight shares of Time Warner common stock.
"The spin-off of Time Inc. completes the process we began several years ago to position Time Warner as the world's leading video content company," Time Warner CEO Jeff Bewkes said in a statement. "The spin-off gives Time Warner even more focus as we continue to deliver on this strategy."
Must Read: Warren Buffett's 25 Favorite Stocks
TheStreet Ratings team rates TIME WARNER INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate TIME WARNER INC (TWX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."