By WSJ City 

Activist investor Elliott Management disclosed a $3.2bn stake in AT&T, criticised the company's strategy and called on the telecommunications giant to shed unnecessary assets.


--- The fund will seek seats on AT&T's board and wants it to sharpen its focus on its core assets.

--- It called on AT&T to boost its profit margins by cutting at least $5bn in costs, including consolidating offices.

--- It wants the company to review any assets that lack a strategic rationale.

--- Such as the DirecTV satellite service and its Mexican wireless operations.

--- It said the company has underperformed the market for the past decade.

--- It put much of the blame on Chief Executive Randall Stephenson's (pictured) acquisition strategy.

"AT&T has been an outlier in terms of its M&A strategy. Most companies today no longer seek to assemble conglomerates."

Elliott Management, In a letter released Monday

"Indeed, many of the actions outlined are ones we are already executing today. AT&T's Board and management team firmly believe that the focused and successful execution of our strategy is the best path forward to create long-term value for shareholders."


Why This Matters

The fund predicted that if AT&T pursues the strategic and operational improvements Elliott suggests, the shares could be worth more than $60 by the end of 2021.

The challenge to the company's strategy comes less than a week after AT&T named longtime executive John Stankey to its newly created chief operating officer position, a move widely seen as preparing him to eventually succeed Stephenson. Elliott questioned the executive change and asked whether AT&T conducted an external review for the new No. 2 position.

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(END) Dow Jones Newswires

September 10, 2019 03:43 ET (07:43 GMT)

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