Summary
- Elliott Management has now purchased shares of AT&T and is challenging the direction executive leadership has taken the company.
- Questions have been raised concerning whether the current leadership of the company really has a workable vision of what a corporation needs to do in the 21st century.
- Now that these questions have been acted upon, investors need to closely watch how the battle proceeds because there area a lot of other companies in positions similar to AT&T.
Several times recently, the latest being in June, I have written about AT&T, Inc. (NYSE:T), and their efforts to become a “new” Modern Corporation.
Like many other legacy corporations, AT&T has made efforts to assume some of the ideas of the “new” Modern Corporation and move into the 21st century as a major new era model - an entity that is competitive with all the Amazons (NASDAQ:AMZN) and Apples (NASDAQ:AAPL) and Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) of the current time.
One of the latest efforts to advance the cause of AT&T came in July. At that point the telephone conglomerate moved, as I wrote in my post, “all of its cloud business to IBM (NYSE:IBM), bringing all its business service applications to IBM's cloud.”
I added, “The hope is that this transaction will signal that both companies have now moved on from their "legacy" business model into something closer to where the real competition is.”
Unfortunately, I have not been impressed.
AT&T was not building an ecosystem comparable to other major “new” tech corporations and it was adding little value connected with its attempts to modernize.
The dividend yield was one that investors highlighted, but the stock price of AT&T lagged, even though management offered up its share of stock buybacks. Furthermore, the vision presented by the leaders of the corporation, one based upon acquisitions, has gotten stale and out of date and leaves one wondering if they really knew what they were doing.
