Hedge fund Elliott Management released a letter critiquing AT&T's acquisition missteps and questioning the strategic value of owning Time Warner.
Hedge fund Elliott Management took a $3.2 billion stake in AT&T, questioning its M&A strategy and operational execution.
That's what Elliott Management seems to be suggesting in its announcement Monday that it's taken a $3.2 billion stake in telecommunications giant. The activist hedge fund cites the company's history of questionable acquisition decisions, including buying DirecTV and Time Warner, and lackluster operational performance to justify its move into the company. In all, AT&T has spent about $200 billion in recent years on acquisitions.
The biggest "whoa" moment from the company's letter may be that Elliott says the board should consider changes to AT&T's leadership.
Elliott says it has a four-part plan that can boost AT&T's share price to more than $60. AT&T rose about 5% in early market trading to about $38 per share. The proposal includes sections on improving strategic focus, operational improvements, a formal capital allocation framework and enhanced leadership and oversight.
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