Have you ever owned a “tracking stock”? Odds are, you don’t even know what it is. Yet some 5 million shareholders of AT & T; Corp. will get tracking stock, like it or not, when the company reorganizes.

Today, AT & T; is America’s second largest stock (behind MetLife). Older investors have trusted it as an income source. Over the years, it has paid a large and steady dividend.

Between now and 2002, however, all that will go away. For the third time in two decades, AT & T; is breaking up.

AT & T; plans to separate into three independent companies with four different stocks. The rich, 88-cent annual dividend will be cut, perhaps even in half.

The financial details of the breakup aren’t yet known. But for the company’s traditional investors, it’s going to be a mess.

You’ll get piles of paper, printed with miles of legalese. You’ll receive strange new “tracking” stocks, which represent different lines of AT & T;’s current business. You’ll be asked to make choices that you might not understand.

Shareholders could wind up with a pro rata share of each new AT & T; stock. All together, they’d be worth the same as your old stock was at least, at first.

Briefly, the three separate companies will be AT & T; Wireless (which will become a regular stock), AT & T; Broadband (the cable operation, which will start as a tracking stock, then change to a regular stock), and plain old AT & T; (for long-distance service, with two tracking stocks).

Wireless and Broadband are supposed to be growth stocks and probably won’t pay dividends.

Plain old AT & T; will harbor two stocks: one still called AT & T; (or AT & T; Business, with phone and other services for business customers); one called AT & T; Consumer (for all consumer phone service).

Both of these stocks will pay dividends, but at different rates. At AT & T; Business, the payout may be modest. At AT & T; Consumer, however, the dividend rate will have to be high.

That’s because the consumer long-distance sector is in decline. Investors will have to be well rewarded to hold that dog that stock. The dividend might exceed 9 percent, says Mark Minichiello, a principal of Spin-Off Advisors, a money management and research service in Chicago.

Now, for that strange new animal, the tracking stock. This type of security doesn’t have much of a history, and what’s there is pretty unimpressive.

When you own common stock, you’re normally treated the same as your fellow stockholders. You all share equally in the company’s profits, dividends and losses.

But a tracking stock is tied to the fortunes of one line of business within the company. It supposedly reflects how well that single business performs.

The price of AT & T; Consumer should respond to the earnings of the consumer long-distance business, as well as to the size of the dividend. It’s aimed at income investors who don’t care much about capital gains.

Meanwhile, AT & T; Business will track the prospects for business long-distance and complementary services. That’s expected to be the more dynamic part.

Only 32 tracking stocks have ever been issued, most of them since the mid-90s, Minichiello says. Only 10 of them have done better than the market as a whole almost all of them stocks that came out in the past two years. Of the 22 under-performers, many plunged while the market rose.

Companies create tracking stocks to try to raise the company’s total stock market value. They hope that the “growthier” part of the business will sell for a higher multiple, once it trades separately.

But tracking stock carries extra risks, says Jeffrey Haas, professor of securities law at New York Law School.

Say that your part of the business does well. In theory, your stock should rise. But if the rest of the company droops (the doggy part), your tracking stock could suffer, too. Before buying, you have to analyze both sides of the business.

There are also huge conflicts of interest. Management might make decisions that favor one group of shareholders over the other. They could decide to grow one part of the business at the expense of the other.

You’ll learn more about AT & T;’s new stocks during the next two years, as restructuring proceeds. “When times are good, a tracking stock can be delightful,” Haas says. “When times aren’t so good, you find out what you really own.”

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington, D.C., 20071-9200.