Time Warner shares hit a new 52-week high Thursday, while AOL shares moved slightly lower in early trading on their first day on the New York Stock Exchange.
The separate stock listings took effect after the online firm completed its separation from TW in a deal that closes the book on the much-maligned AOL-TW merger. "Today marks a rebirth," chairman and CEO Tim Armstrong said in a conference call with reporters Thursday morning.
As of 11:05 a.m., AOL shares traded at $23.24, which gave the company a market capitalization of $2.46 billion. The stock had opened at $23.39 after declining in recent weeks when it was trading on a so-called when-issued basis ahead of its market start.
Asked by reporters if he was disappointed by the early trading trends, Armstrong said he is focused on getting back to work and rebuilding AOL. "I haven't looked," he said. "The stock price doesn't reflect the work. It will go up and down." He owns a stake of about 2 percent in AOL.
Miller Tabak analyst David Joyce on Thursday initiated coverage of AOL with a "buy" rating and $32 short-term price target. "AOL shares are very cheap at current levels and the company is generating a significant amount of cash," he said.
Armstrong had rung the NYSE opening bell Thursday morning after AOL staff celebrated its spin-off on the floor of the stock exchange Wednesday night.
Thursday also saw the launch of AOL's redesigned homepage.
"With the separation of AOL, we've returned to our roots as one of the leading content companies in the world," TW chairman and CEO Jeff Bewkes said. "We're now better positioned to focus even more closely on driving the best possible performance at our content businesses in the most efficient way. I'm confident that Time Warner is on track to generate steady, attractive financial results and improve returns to our stockholders."
In a staff memo obtained by The Hollywood Reporter, Bewkes said: "With the economy starting to recover, we expect to see our businesses become more profitable. Even more importantly, our strengths in content are becoming more valuable, as the media industry and consumer usage evolve."
While new technologies have given the industry some headaches by creating new competitors, the TW boss highlighted the opportunities for popular content. "Despite all these choices, consumers are gravitating more than ever to blockbuster content," he said in his memo. "In addition to generating a bigger audience, big hits attract more consumer spending."
TW shares were up 4.6 percent to $30.56 as of 11:05 a.m. after hitting a new 52-week high of $30.74 earlier in the trading session.