Elliot unveils $3.2 billion AT&T stake, calls management to shake-up

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Elliot unveils $3.2 billion AT&T stake, calls management to shake-up

On Monday, the 9th of September 2019, US-based activist investment firm, Elliot Management Corp., founded and headquartered in NY by a Paul Singer back in the late 1970s, had revealed a $3.2 billion stake in the No. 2 wireless carrier of United States, AT&T Inc., and urged AT&T’s management board to put an halt to its acquisition addiction, calling the Dallas, Texas-based US telecommunication and media conglomerate to centre its focus on enhancing its business.

As the New York City based hedge fund manager, Elliot, the largest activist firm in the world and the seventh largest asset management firm in the world with $35 billion under its management, had unveiled its stakes on AT&T Inc., the move makes AT&T Inc.

to become one of the three largest companies in the United States behind Apple Inc. and Microsoft, which were often targeted by activist shareholders, who could prompt managements to make trend-shifting changes likes of potential sell-off of loss making units, buying back shares to balance stock price alongside seeking a spot among board members.

Aside from that, followed by reveal of the news, a harsh critic of AT&T Inc.-owned CNN, US President Donald Trump had called "Elliot’s announcement" a “great news” later on Monday (September 9th), while Elliot unleashed several proposals claiming that the hedge fund could uplift AT&T Inc.’s share price more than 60 per cent by the end of 2021.

Elliot’s plan includes a swath of reforms ranging from divesting some of AT&T Inc.’s businesses, elimination of $5 billion in expenses alongside putting an end to AT&T Inc. CEO Randall Stephenson’s aggressive approach to acquisitions.

Besides, news of Elliot’s stake in AT&T Inc. lifted the share prices of No. 2 US wireless carrier behind Verizon Communications, 4 per cent higher to its yearly peak at $37.78 per share, however wrapped up Monday’s (September 9th) market up by 1.49 per cent to $36.79 a share after AT&T Inc., the media conglomerate with market cap worth of $270 billion had told that the company would review Elliot’s view and engage with stakeholder.