Elliott Management Takes Stake in AT&T, Urges Sales of Some Businesses

Connor Smith Telecom T VZ Verizon Communications AT&T Telecommunication Services Wireless Telecommunications Services Trusts/Funds/Financial Vehicles Financial Investments Portfolio/Fund/Asset Management Alternative Investments Financial Services Hedge Funds Investing/Securities Jesse Cohn Elliott Marc Steinberg Financial Performance Share Price Movement/Disruptions Ownership Changes Acquisitions/Mergers/Shareholdings Management Corporate Actions Shareholder Activism Corporate/Industrial News Corporate Governance Divestments Content Types Factiva Filters C&E Exclusion Filter C&E Industry News Filter ELLA.XX I/AMG I/CTS I/IAV I/TLS I/XFFX I/ZFU M/FCL N/CAC N/CNW N/COGV N/DJN N/DVT N/IAT N/MNT N/PFM N/TNM N/WER T VZ Barrons.com Barrons Blogs Wires Fortune 500 CODES_REVIEWED Telecom author Connor Smith author|Connor Smith topicid 8589 name Connor Smith extractedtext Connor Smith rank 1 codetype author code connor_smith nameformat surname_first author Connor Smith id Connor Smith barrons_display_subject BARTEL barrons_display_subject|BARTEL canbedisplaysubject true codetype BARRONS_DISPLAY_SUBJECT name Telecom source MANUAL value BARTEL code BARTEL status modified co belatt co|belatt country US symbol VZ codetype co displayname Verizon Communications why about extractedtext Verizon Communications source FACTIVA occurs true seoname verizon_communications name Verizon Communications orgtype public countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/VZ fcode belatt fullextractedtext Verizon Communications ticker VZ confidence 100 subcat com code belatt relevance 28 significance prominent onlinesignificance prominent confidencerange high exchange NYSE exchangeisocode XNYS co ellas co|ellas codetype co why about source FACTIVA subcat com code ellas significance prominent onlinesignificance prominent fcode ellas co ellmcz co|ellmcz significance prominent codetype co onlinesignificance prominent why about source FACTIVA subcat com code ellmcz fcode ellmcz co sbcatt co|sbcatt country US symbol T codetype co displayname AT&T why about extractedtext AT&T source FACTIVA occurs true seoname at_t name AT&T orgtype public countrycode US relevancerange high chartingsymbol STOCK/US/XNYS/T fcode sbcatt fullextractedtext AT&T ticker T confidence 100 subcat com code sbcatt relevance 98 significance prominent onlinesignificance prominent confidencerange high exchange NYSE exchangeisocode XNYS company VZ company|VZ name Verizon Communications significance PROMINENT company T company|T name AT&T significance PROMINENT djn I/ZFU djn|I/ZFU name I/ZFU why association source FACTIVA fcode I/ZFU codetype djn code i_zfu djn VZ djn|VZ codetype djn why about source FACTIVA occurs true code vz name VZ significance prominent onlinesignificance prominent fcode VZ djn ELLA.XX djn|ELLA.XX codetype djn why about source FACTIVA code ella_xx name ELLA.XX significance prominent onlinesignificance prominent fcode ELLA.XX djn T djn|T codetype djn why about source FACTIVA occurs true code t name T significance prominent onlinesignificance prominent fcode T djn I/TLS djn|I/TLS codetype djn why about source FACTIVA code i_tls name I/TLS significance prominent onlinesignificance prominent fcode I/TLS djn I/CTS djn|I/CTS codetype djn name I/CTS why association source FACTIVA code i_cts fcode I/CTS djn I/IAV djn|I/IAV codetype djn name I/IAV why lineage source FACTIVA code i_iav fcode I/IAV djn I/AMG djn|I/AMG codetype djn name I/AMG why association source FACTIVA code i_amg fcode I/AMG djn M/FCL djn|M/FCL codetype djn name M/FCL why lineage source FACTIVA code m_fcl fcode M/FCL djn N/PFM djn|N/PFM codetype djn why about source FACTIVA code n_pfm name N/PFM significance prominent onlinesignificance prominent fcode N/PFM djn N/TNM djn|N/TNM codetype djn why about source FACTIVA code n_tnm name N/TNM significance prominent onlinesignificance prominent fcode N/TNM djn N/IAT djn|N/IAT codetype djn why about source FACTIVA code n_iat name N/IAT significance prominent onlinesignificance prominent fcode N/IAT djn N/DVT djn|N/DVT codetype djn why about source FACTIVA code n_dvt name N/DVT significance prominent onlinesignificance prominent fcode N/DVT djn N/MNT djn|N/MNT codetype djn name N/MNT why lineage source FACTIVA code n_mnt fcode N/MNT djn N/CAC djn|N/CAC codetype djn name N/CAC why lineage source FACTIVA code n_cac fcode N/CAC djn N/CNW djn|N/CNW codetype djn name N/CNW why lineage source FACTIVA code n_cnw fcode N/CNW djn N/COGV djn|N/COGV codetype djn name N/COGV why lineage source FACTIVA code n_cogv fcode N/COGV djn I/XFFX djn|I/XFFX codetype djn why about source FACTIVA code i_xffx name I/XFFX significance prominent onlinesignificance prominent fcode I/XFFX djn N/DJN djn|N/DJN codetype djn name N/DJN source DJN-CONTROL value N/DJN code n_djn status modified inactivebydefault true djn N/WER djn|N/WER codetype djn name N/WER source DJN-CONTROL value N/WER code n_wer status modified inactivebydefault true editorial-seo-id at-t-stock-activist-investor-shakeup-elliott-management-51568034290 editorial-seo-id|at-t-stock-activist-investor-shakeup-elliott-management-51568034290 first_publish_headline Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses first_publish_headline|Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses flow NWREGULAR flow|NWREGULAR codetype FLOW name Wires source MANUAL value NWREGULAR code NWREGULAR status modified flow Barrons.com flow|Barrons.com codetype FLOW name Barrons.com source MANUAL value Barrons.com code online status modified name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW source MANUAL title Product code Barrons_Blogs name Barrons Blogs value Barrons Blogs status modified headline Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses headline|Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses idx xf500 idx|xf500 codetype idx why about source FACTIVA code xf500 name Fortune 500 significance prominent onlinesignificance prominent fcode xf500 in i7902 in|i7902 codetype in why about source FACTIVA code i7902 name Telecommunication Services significance prominent onlinesignificance prominent fcode i7902 in i79022 in|i79022 codetype in name Wireless Telecommunications Services why association source FACTIVA code i79022 fcode i79022 in i81502 in|i81502 codetype in name Trusts/Funds/Financial Vehicles why lineage source FACTIVA code i81502 fcode i81502 in i831 in|i831 codetype in name Financial Investments why lineage source FACTIVA code i831 fcode i831 in i83107 in|i83107 codetype in name Portfolio/Fund/Asset Management why association source FACTIVA code i83107 fcode i83107 in ialtinv in|ialtinv codetype in name Alternative Investments why lineage source FACTIVA code ialtinv fcode ialtinv in ifinal in|ifinal codetype in name Financial Services why lineage source FACTIVA code ifinal fcode ifinal in ihedge in|ihedge codetype in name Hedge Funds why association source FACTIVA code ihedge fcode ihedge in iinv in|iinv codetype in name Investing/Securities why lineage source FACTIVA code iinv fcode iinv media media-2 media|media-2 responsive layout wrap softcrop Horizontal imphotoid im-105226 location https://images.barrons.com/im-105226/?size=1.5 media media-1 media|media-1 softcrop Horizontal imphotoid im-105226 location https://images.barrons.com/im-105226/?size=1.5 ns c1522 ns|c1522 codetype ns why about source FACTIVA code c1522 name Share Price Movement/Disruptions significance prominent onlinesignificance prominent fcode c1522 ns c15 ns|c15 codetype ns why about source FACTIVA code c15 name Financial Performance significance prominent onlinesignificance prominent fcode c15 ns c181 ns|c181 codetype ns why about source FACTIVA code c181 name Acquisitions/Mergers/Shareholdings significance prominent onlinesignificance prominent fcode c181 ns cactsh ns|cactsh codetype ns why about source FACTIVA code cactsh name Shareholder Activism significance prominent onlinesignificance prominent fcode cactsh ns cdiv ns|cdiv codetype ns why about source FACTIVA code cdiv name Divestments significance prominent onlinesignificance prominent fcode cdiv ns c18 ns|c18 codetype ns name Ownership Changes why lineage source FACTIVA code c18 fcode c18 ns c41 ns|c41 codetype ns name Management why lineage source FACTIVA code c41 fcode c41 ns cactio ns|cactio codetype ns name Corporate Actions why lineage source FACTIVA code cactio fcode cactio ns ccat ns|ccat codetype ns name Corporate/Industrial News why lineage source FACTIVA code ccat fcode ccat ns ccpgvn ns|ccpgvn codetype ns name Corporate Governance why lineage source FACTIVA code ccpgvn fcode ccpgvn ns ncat ns|ncat codetype ns why lineage source FACTIVA code ncat name Content Types internalsymbol true fcode ncat ns nfact ns|nfact codetype ns why lineage source FACTIVA code nfact name Factiva Filters internalsymbol true fcode nfact ns nfce ns|nfce codetype ns why lineage source FACTIVA code nfce name C&E Exclusion Filter internalsymbol true fcode nfce ns nfcpin ns|nfcpin codetype ns why lineage source FACTIVA code nfcpin name C&E Industry News Filter internalsymbol true fcode nfcpin nwchain SB527738632899569448639045855400822194252581 nwchain|SB527738632899569448639045855400822194252581 pe Elliott pe|Elliott lastname Elliott displayname Elliott name Elliott extractedtext Elliott source FACTIVA codetype pe code elliott nameformat surname_first pe 134870547 pe|134870547 lastname Cohn codetype pe displayname Cohn, Jesse confidence 100 why occur extractedtext Jesse Cohn source FACTIVA code 134870547 relevance 75 name Jesse Cohn significance passing firstname Jesse onlinesignificance passing-mention nameformat surname_first confidencerange high relevancerange medium fcode 134870547 pe Marc Steinberg pe|Marc Steinberg lastname Steinberg codetype pe displayname Steinberg, Marc extractedtext Marc Steinberg source FACTIVA code marc_steinberg name Marc Steinberg firstname Marc nameformat surname_first relay SYND relay|SYND codetype RELAY name Syndication source EXPANDER value SYND code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARTEL subject|BARTEL codetype SUBJECT title Telecom code BARTEL name Telecom canbedisplaysubject true ruleid BARTEL value BARTEL status modified wordcount 675 wordcount|675 Photograph by Gabriel Bouys/AFP/Getty Images Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses AT&T Stock Is Taking Off. Activist Investor Calls for a Shakeup

Elliott Management says AT&T has the opportunity to be the leader in 5G telecommunications, and should consider selling or spinning off noncore businesses such as DirecTV.

Elliott Management Takes Stake in AT&T, Urges Sales of Some Businesses

The activist investor says AT&T has the opportunity to be the leader in 5G telecommunications, and should consider selling or spinning off noncore businesses such as DirecTV.

https://www.businesswire.com/news/home/20190909005482/en/Elliott-Management-Sends-Letter-Board-Directors-ATT https://www.barrons.com/articles/at-t-stocks-big-dividend-gives-it-the-edge-over-verizon-51553904001 https://www.barrons.com/articles/3-cheap-stocks-with-some-price-momentum-51567817341 mailto:connor.smith@barrons.com Activist Investor Takes Stake in AT&T, Calls for Sales of Some Businesses By Connor Smith Photograph by Gabriel Bouys/AFP/Getty Images

AT&T shares shot up after Elliott Management revealed a $3.2 billion stake in the company, as well as a plan the activist investor says could bring a 65% gain in the stock by the end of 2021.

Elliott Management’s Jesse Cohn and Marc Steinberg wrote in a letter to AT&T’s board that the company is “deeply undervalued,” saying it is inefficiently run compared with rival Verizon Communications (VZ).

“AT&T’s core telecommunications businesses are actually performing well and are well positioned for the future,” they noted. “Unfortunately, the poor results at (the much smaller) DirecTV and general concern about the Company’s ability to execute have obfuscated this otherwise-strong positioning.”

AT&T shares (ticker: T) were up 4.5% at $37.90 in morning trading.

Elliott Management’s plan focuses on “instituting strategic focus and operational discipline,” the activist investor’s letter said. Steps to achieve that goal include divesting non-core assets, reducing operational inefficiency, instituting capital discipline and aggressively reducing debt, and enhancing leadership and oversight.

By doing this, they wrote, “AT&T can improve its business and deliver historic value creation for all stakeholders.” They say the stock could reach more than $60 a share by the end of 2021, prior to what they called strategic actions relating to the portfolio.

Strategic actions generally refer to moves such as buying, selling, or spinning off businesses.

“We look forward to engaging with Elliott,” AT&T said in a written statement. “Indeed, many of the actions outlined are ones we are already executing today.”

The company said the board and management believe that following through on its strategy, which is based on building up its portfolio of businesses in communications, media, and entertainment, is the best way to create value for shareholders.

Elliott said a key aspect of its plan is taking advantage of the transition to 5G, which presents a new chance for AT&T to “reset the wireless narrative and reclaim market leadership” from Verizon.

“AT&T today is in prime position to be the early market leader in 5G given its premier spectrum positioning, early LTE-Advanced work and recent network improvements (driven by the FirstNet build and its one-touch strategy),” they wrote.

They suggested AT&T evaluate selling or spinning off non-core assets, listing its “home security business, regional sports networks, CME, Sky Mexico, Latin American pay TV business (Vrio), Puerto Rican operations and many, many more.”

But it shouldn’t stop there, they added, noting that any review should include “any assets that do not have a clear, strategic rationale for being part of AT&T.” Businesses in that category include DirecTV, the Mexican wireless operations, and pieces of the wireline network, among other assets.

Barron’s argued in a cover story posted after the market closed on March 29 that AT&T’s differentiated business strategy and generous dividend could provide upside compared to Verizon. AT&T stock has since gained nearly 16% through last week’s close, while Verizon shares have fallen 0.1%. And in this weekend’s edition, Barron’s noted AT&T still looked cheap.

Write to Connor Smith at connor.smith@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.