AT&T Shares Rise After Activist Shareholder Discloses $3.2 Billion Stake
Activist shareholder Elliott Management, which has pressed for big changes at companies including Barnes & Noble and Interpublic Group, said Monday it had taken a stake valued at $3.2 billion in the shares of telecommunication giant AT&T, and urged the company to focus more intently on its operations after a series of big acquisitions and missed opportunities have, in Elliott’s words, “eroded AT&T’s business focus and shareholder value.”
AT&T is grappling with subscriber losses at satellite-distributor DirecTV, which it acquired for $49 billion in 2016 and working to reduce debt after buying the former Time Warner for $85 billion last year.
The shareholder suggested that AT&T’s move into what it believes are non-core markets – DirecTV and WarnerMedia among them – “has not only contributed directly to its profound share price underperformance, but has also caused distractions that have contributed to the Company’s recent operational underperformance.”
In a statement, AT&T said it welcomed the chance to consult with its new investor. “Our management team and board of directors maintain a regular and open dialogue with shareholders and will review Elliott Management’s perspectives in the context of the company’s business strategy,” AT&T said.
Elliott was founded in the 1970s by billionaire Paul Singer, and has tended to focus on holdings that deliver high returns while maintaining stable operations. In recent months, it has stepped up its activity, pushing companies ranging from Nielsen to Pernod Ricard to re-examine its businesses.
Shares of AT&T rose $1.03 in early Monday trading, up 2.83% after settling down from an intraday high of $38.07 per share. Volume in the company’s stock was higher-than-normal, standing at more than 74.1 million shares. Average volume is more than 27.9 million shares.
Sept. 13, 2019