SunTrust Banks stepped into the spotlight Tuesday as it reported second-quarter earnings, but key details in the report also gave Coca-Cola Co. stock a boost. In its earnings report, SunTrust, a major Coke shareholder, announced actions that affect more than 40 million shares of its Coke stock. The disclosure removed a measure of uncertainty that had been hanging over Coke stock. Coke stock, traded under the ticker symbol KO, had fallen Monday to a 52-week low, closing at $49.60 a share. It rose 3.5 percent Tuesday to close at $51.35 on the SunTrust news. In the release, SunTrust said it had sold 10 million shares of Coke stock in June and donated 3.6 million shares to its charitable trust. It also had set up a process to sell another 30 million Coke shares over the next seven years. SunTrust officials said last year they were reviewing how best to handle the company's Coke stock, leading analyst to speculate a sale was imminent. The details released Tuesday may have cleared up investor concerns about how such a large number of Coke shares would be put into the market. "The final resolution of SunTrust's planned disposition of KO's shares should be a positive for the stock," Morgan Stanley analyst Bill Pecoriello wrote Tuesday in a note to investors. "There has been concern from investors about buying ahead of a large share sale." SunTrust and Coke, both Atlanta-based companies, have been tied together for more than 100 years. SunTrust's predecessor, Trust Company of Georgia, helped take Coke public in 1919. Atlanta businessman Ernest Woodruff was a key figure in both firms. At the end of the first quarter, SunTrust owned 85 million shares of Coke stock, or 3.7 percent of all outstanding shares, according to a filing with the Securities and Exchange Commission. That made it the second-largest Coke shareholder behind Warren Buffett-led Berkshire Hathaway, which owns 200 million shares. SunTrust's Coke holdings include about 40 million shares in trust and retirement accounts. These shares were not affected by the actions announced Tuesday.
The Atlanta Journal-Constitution
Published on: 07/22/08
UPDATED: 5:43 p.m. July 22, 2008
RELATED:
• SunTrust 2Q earnings down 20 percent
COCA-COLA NEWS
Latest Headlines:
• More Coke News
Share Investor Business News- Get more business news
Share Investor Stockmarket forum Discuss this topic further
Share Investor Forum's July GIVEAWAY!!
No comments:
Post a Comment