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AT&T Faces Demands for Strategy Shift From Hedge Fund

One of Wall Street’s biggest hedge funds said on Monday that it has taken a $3.2 billion stake in AT&T and urged the telecommunications giant to change its business strategy to bolster its share price.

Though the fund, Elliott Management, owns a small piece of AT&T — its holdings amount to just over 1 percent of the company’s $271 billion market capitalization — it has the clout to wage a fight against the company, which it says has underperformed for years as it struck giant acquisitions and lost ground in the race to dominate the American telecom landscape.

Funds like Elliott Management often take small positions in companies they hope to influence, and then try and rally the support of other investors behind their cause — which is ultimately to bolster the company’s share price. The $38 billion fund, in a lengthy letter to AT&T’s board of directors, asked the company to stop striking new acquisitions, increase dividends and share buybacks, and improve its efficiency, among other changes. Shares in AT&T rose more than 4 percent in early trading on Monday.

The hedge fund’s campaign also drew support from left field: President Trump, who applauded Elliott’s move as part of his longstanding grudge against CNN, which AT&T owns. “Great news that an activist investor is now involved with AT&T,” Mr. Trump posted. “As the owner of VERY LOW RATINGS @CNN, perhaps they will now put a stop to all of the Fake News emanating from its non-credible ‘anchors.’”

In an emailed statement, AT&T said: “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.”

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