Every once in a while, Wall Street tries to persuade investors that the sum of the parts is greater than the whole. Tracking stocks are this year's attempt. But is the calculus suspect?

A tracking stock is a separate class of shares issued by a company seeking to "unlock value" in one of its businesses. The parent company separates the unit's bookkeeping from the main company's financials, and the new stock "tracks" the results of the new business.

Last week, AT&T conferred big-league status on tracking stocks with plans to create a tracker for its wireless business. AT&T will sell something less than 20 percent of the business in a public offering next spring, which analysts say could raise $8 billion to $10 billion; the rest will go to Ma Bell shareholders.

AT&T is in good company. General Motors in 1984 issued the first tracking stock for its EDS subsidiary, since spun off completely. GM's "H" stock, for its Hughes satellite division, came a year later. No more debuted until 1991.

The pace quickened after November 1998, when Sprint offered stock in its PCS wireless unit, since up nearly 500 percent. Not surprisingly, 11 of the 27 tracking stocks trading are new to the market since Sprint, and more are coming. SBC Communications is mulling over a wireless tracking stock. Office-products retailer Staples plans one for its online business, and Internet portal Excite@Home is readying a tracker for its content business.

Why the rush? Companies see tracking stocks as a way to spotlight their fastest-growing units, enabling them to raise money from investors interested in those businesses. With fresh cash and newly minted stock, companies can make acquisitions, or lure top talent with stock options. Another hope: a greater stock-market value for the entire company.

The advantages for shareholders are less clear. The performance for most tracking stocks ranges from lackluster to downright dismal (table). Even in the best of times, tracking stocks will generally trade at a 5 to 15 percent discount from their industry peers, says New York Law School professor Jeffrey Haas. Tracking stocks are not the pure play they seem; investors still own a piece of a larger company.

Linked at the hip. In contrast to a spin-off, in which a parent company divests a subsidiary, a tracking stock is a bookkeeping device. "The businesses are linked at the hip like a set of conjoined twins," says Haas, setting up rivalries among competing shareholders. When Ziff-Davis issued its tracker, ZDNet, to the public, the IPO raised $220 million. But ZDNet got just $25 million. The rest went to pay down debt at Ziff-Davis, according to investment-research firm Spin-Off Advisors.

What most tracking-stock shareholders must remember, says Spin-Off's Mark Minichiello, is that they don't own the assets of the tracking subsidiary outright. They have limited voting rights, if any, and cannot elect their own boards. Why buy trackers at all? Analysts say the rash of telecommunications trackers reflects the paucity of mainline wireless stocks available to investors.

Before investors load up on tracking stocks, they should take note of what was quietly announced last week at Pittston Co. It is abandoning the tracking stock structure of its three businesses–Brink's armored cars, a freight business, and a coal-mining unit that has lost 87 percent since it began trading in July 1993. The separate stock structure did not keep coal-related liabilities from dragging down the others as well. In Pittston's case, anyway, "unlocking value" became "sharing the pain."