Summary
- The management team at AT&T just announced that it is selling its minority stake in Hulu back to the company.
- This move further cements Disney's control over the streaming service and will pay down some of AT&T's debt.
- However, this is a big mistake for the telecommunications company, which should be looking for strong growth opportunities, not divesting of them.
- This move will likely leave billions of dollars on the table and reduce the company's ability to negotiate terms with Hulu in the future.
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One great thing about large corporations like AT&T (T) is that they have significant resources with which to grow, and doors of opportunity often open for them. A downside, though, is that all too often those same companies, whether due to bureaucracy or shortsightedness or something else entirely, make suboptimal decisions that, while not necessarily impairing shareholder value, will lead to lackluster results in the long run. While I often try to talk about the upsides for firms, sometimes the downside needs to be discussed, and such is the case today with what is bothering me about a recent decision made by the management team at AT&T.
