Shares of AOL, the Internet darling at the dawn of the dot-com boom in the early 1990s, are up 18% in pre-market trade after telecom giant Verizon said it will buy the digital content player for $4.4 billion.
Verizon said it will purchase AOL for $50 a share, or a 17.4% premium above AOL’s closing price Monday of $42.59.
In pre-market trading about 90 minutes before the opening bell on Wall Street, AOL (AOL) shares were up $7.76, or 18.2%, to $50.35. The big jump in AOL shares was reminiscent of its 28% pop on its first day of trading way back on March 19, 1992.
Shares of Verizon (VZ) were down 40 cents, or 0.8%, to $49.40.
AOL is best known for being the first Internet company — as we now know it — to go public more than 23 years ago. AOL was also involved in what at the time was the merger of all mergers with Time Warner, a big deal which closed in early 2001.
Today, a once-again independent AOL, under CEO Tim Armstrong since March 2009, is best known for its digital content, which includes online media site Huffington Post and an expansive video footprint.
The marriage between digital communications giant Verizon and AOL will provide fresh content, distribution and advertising opportunities for the newly formed company.
In an interview with CNBC earlier this morning, Armstrong said the newly merged company was setting itself up for the next five or 10 years, in which “there will be (a need for) a massive global scale network” in the fast-growing digital space.
“The world is changing,” Armstrong told CNBC.