WARNING: IS THERE SOMETHING HIDING BEHIND AT&T?
MAY 17, 2021 — AT&T ANNOUNCES MAJOR REALIGNMENT. EMPLOYEES BEWARE!
The company is proposing to combine WarnerMedia (HBO, CNN, Warner Bros. movie studio) with Discovery, the cable TV programmer that owns the Food Network and HGTV in a $43 billion dollar deal. Discovery President and CEO David Zaslav will lead the new, combined company and employees will drop like flies when the duplicative functions are eliminated and synergies explored.
NOVEMBER 14, 2020 — IS CNN FOR SALE?
AT&T is still struggling financially and is plagued with an activist investor, Elliot Associates. CNN has lost significant audience share and stands to lose even more if Trump leaves the stage. Due to anti-trust considerations, most communications and media companies may be out of the running. Which leaves gazillionaire Jeff Bezos as a potential purchaser. Who knows?
JUNE 16, 2020 — 4,700 LAYOFFS, 250 STORES CLOSED
“AT&T has informed the Communications Workers of America of its plans to cut over 3,400 technician and clerical jobs across the country over the next few weeks. In addition, the company plans to permanently shutter over 250 AT&T Mobility and Cricket Wireless stores, impacting 1,300 retail jobs.”
According to an AT&T spokesperson…
“These actions align with our focus on growth areas along with lower customer demand for some legacy products and the economic impact and changed customer behaviors resulting from the COVID-19 pandemic. As a result, there will be targeted, but sizable reductions in our workforce across executives, managers and union-represented employees, consistent with our previously announced transformation initiative. Additionally, we’ll be eliminating more non-payroll workers — the vast majority of which are outside the United States – than we are managers or union-represented employees. Reducing our workforce is a difficult decision that we don’t take lightly.
MAY 20, 2020 — WILL DIRECTTV AND DISH MERGE?
According to DISH Chairman and CED Charlie Ergen. “You just can't swim upstream against a real tide of big players. If AT&T eyes possible buyers for DirecTV, Dish is seen as an obvious suitor, especially after it tried and failed to merge with the satellite TV provider in 2002.”
Ergen noted that the “long-rumored merger of DirecTV and Dish was "inevitable" — despite reticence from AT&T to divest itself of the asset — as neither satellite TV-delivered linear TV service was growing.”
APRIL 24, 2020 — CEO OUT AT DIRECTION OF ACTIVIST INVESTOR
AT&T has announced that CEO Randall Stephenson will retire and President and COO John Stankey will take over the position on July 1, 2020.
There is little doubt that the changes were driven by activist investor Elliot Management. “We have been engaged with the company throughout the search process, which was a robust one, including a range of highly qualified outside candidates and overseen by independent directors,” according to Elliott partner Jesse Cohn.
Look for further divestments, cost-cutting, reduction in headcount, stock buy-backs, and upstreamed dividends.
OCTOBER 17, 2019 — Original post…
Is there a clear and present danger hiding behind AT&T operations now that activist investor Elliot Management has taken a $3.2 billion position in the communications giant. It history is a guideline, Elliot’s management will waste no time in demanding reforms that will boost share prices through a series of divestitures, store closures, cost-cutting, layoffs, and share buy-backs. One significant red flag would be Elliot’s insistence on Board representation and possibly a proxy fight to advance their agenda.
The Communications Workers of America have issued a warning suggesting that Elliot’s actions could result in a restructuring that might put 30,000 employees at risk for layoffs. Of course, AT&T rejects such an idea as speculative posturing.
For those concerned about Elliot’s influence over AT&T, here is an excerpt of a letter which can be read, in full and in context, here.
Dear Members of the Board:
We are writing to you on behalf of Elliott Associates, L.P. and Elliott International, L.P. (together, “Elliott” or “we”). Elliott owns $3.2 billion of the common stock and economic equivalents of AT&T Inc. (the “Company” or “AT&T”). The large scale of our investment reflects our deep conviction in the extraordinary value opportunity realizable at AT&T today.
AT&T is unquestionably one of the world’s most important companies and one of America’s proudest technological stories. Nearly 150 years after its founding, AT&T remains a vital steward of global infrastructure, serving more than 370 million direct-to-consumer relationships and employing more than 250,000 people across virtually every country in the world. There is a great deal at stake in ensuring that AT&T realizes its potential – for shareholders, for consumers, for employees, and even for the U.S. as a global telecom leader.
It is through this lens that Elliott approaches its investment in AT&T. Though it is outside the scope of this letter to detail AT&T’s rich and pioneering history, we want to make clear that Elliott has tremendous respect for the Company’s legacy, as well as for the hard work, ingenuity, and passion of its dedicated employees, who work tirelessly to ensure our world remains connected.
The purpose of today’s letter is to share our thoughts on how AT&T can improve its business and realize a historic increase in value for its shareholders. Elliott believes that through readily achievable initiatives – increased strategic focus, improved operational efficiency, a formal capital allocation framework, and enhanced leadership and oversight – AT&T can achieve $60+ per share of value by the end of 2021. This represents 65%+ upside to today’s share price – a rare opportunity for any company, let alone one of the world’s largest.
Our letter today is organized as follows:
•Long-Term Underperformance: AT&T’s shareholder returns have been disappointing over a prolonged period.
•How We Got Here: A combination of strategic and operational setbacks has eroded AT&T’s business focus and shareholder value.
•The AT&T Opportunity: Despite the setbacks, AT&T still possesses a world-class collection of leading assets, priced today at historically discounted levels.
•The Activating AT&T Plan: AT&T can unlock significant value by focusing its asset portfolio, improving operational performance, instituting clear capital priorities, and enhancing leadership and oversight.
The Activating AT&T Plan (the “Plan”) is premised upon immediately instituting strategic focus and operational discipline. By divesting non-core assets; reducing operational inefficiency; instituting capital discipline and aggressively de-levering; and enhancing leadership and oversight, AT&T can improve its business and deliver historic value creation for all stakeholders. (Read the details here.)
•Upside of a Unique Magnitude: These steps will create value that is substantial and achievable today.
Elliott looks forward to working collaboratively with the AT&T team to act on this opportunity and realize the Company’s full potential.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?
