NEW YORK (The Street) -- Following Verizon Communications' (VZ) announcement on Tuesday of plans to purchase AOL (AOL) for $4.4 billion, Verizon shares plummeted .46% for the day, to $49.62. The New York-based telecommunications company hopes to grow its mobile video and advertising efforts and gain from AOL's advertising technology platform.
Verizon, which last year reported $127 billion in revenue and $12 billion in profit, is looking to AOL to help differentiate itself from its competitors in the wireless business. The company already announced plans to launch a video service aimed at mobile devices, and the AOL acquisition will bring them closer to achieving that goal.
The deal is expected to close this summer, and according to both companies, AOL CEO Tim Armstrong will continue to lead AOL's operations.
Sprint's (S) stock price fell after the company arrived at a settlement with consumers for charging unauthorized fees. The share price of AT&T (T) rose as the company announced a new data rollover program.
Sprint fell .85% to close at $4.66 following reports it would pay a settlement to end a lawsuit against it.
Both Sprint, as well as Verizon, were accused of a practice known as "cramming," in which companies place unauthorized charges on customers' phone bills. Verizon and Sprint specifically had been charging about $10 per month for premium third-party text message services.
Sprint will pay $68 million to settle the case, and Verizon will pay $90 million. At least $120 million of the total will go directly to the consumers that were hit with the extra charges.