Historical Stock Chart
2 Months : From Aug 2019 to Oct 2019
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.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
September 10, 2019 03:43 ET (07:43 GMT)
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