Elliott Management shook up AT&T last year when it sent an open letter to AT&T’s board of directors, criticizing everything from soup to nuts about the company.
But yesterday, Elliott filed an SEC form 13F, signaling its exit of AT&T. The activist hedge fund sold 5 million AT&T shares in Q3, valued at $151.15 million as of the previous quarter's end, according to Yahoo Finance.
In its September 2019 letter to the board, Elliott criticized AT&T's attempted, but failed, purchase of T-Mobile and its acquisition of DirecTV. And it penned an entire section entitled “Poor Execution in Wireless.”
In response, AT&T said it would work with Elliott, and it said it was already in the process of making many of Elliott’s suggestions. Indeed, AT&T had already been selling certain assets to reduce its debt load.
Elliott also wanted AT&T to conduct stock buybacks. In this way, the total number of AT&T shares would decrease, raising the price so that investors like Elliott could make a big profit.
In early March, AT&T said it would be repurchasing $4 billion worth of its shares during the second quarter, and it had plans for more buybacks throughout 2020. However, the Covid 19 crisis hit, and then AT&T put its accelerated share repurchase plans on hold.
In mid-2020, AT&T’s longtime CEO Randall Stephenson retired, and he was replaced by John Stankey, who had previously been the company’s chief operating officer.
One of the few areas where Elliott had complimented AT&T was acknowledging that the carrier had valuable wireless assets, including its spectrum holdings and its FirstNet build.
Ironically, AT&T is currently facing a great opportunity to gain valuable mid-band spectrum in the upcoming C-Band auction. But it’s been so intent on selling assets to pay off debt, that it faces a quandary: stick with its debt-reduction plan or make a capital outlay to invest in C-band for its future?
When Elliott sent its letter to AT&T’s board of directors in early September 2019, AT&T’s stock was trading at about $36.25. Today, AT&T’s stock is trading at $28.90.