Elliott Management Corporation, which now manages $3.2 billion worth of AT&T shares, wrote a lengthy letter to the telecom and media giant’s board of directors on Monday outlining what Elliott called AT&T’s “long-term underperformance.”
“AT&T’s shareholder returns have been disappointing over a prolonged period,” the investor wrote. The letter pointed to acquisitions that haven’t panned out, missed opportunities, operational inefficiencies, and AT&T’s “poor execution in wireless.”
Signed by partner Jesse Cohn and Elliott’s Associate Portfolio Manager Marc Steinberg, the detailed memo seemed to have an immediate impact on AT&T’s stock price, as shares rose more than 5% in pre-market trading. That’s more than $2 per share for the relatively inexpensive stock, which Elliott believes could be as high as $60 per share — or more — by the end of 2021.
That uptick cooled off a hair when U.S. stock markets officially opened at 9:30 a.m. ET. See the movement below. We chose a five-day snapshot to best depict this morning’s increase.
AT&T stock (T) closed Friday at $36.25 per share. The company’s current market cap is just under $265 billion.
Elliott has been buying up AT&T shares over time, a person with knowledge of their investment told TheWrap. Now that the accumulation is “significant,” they decided to go public with the letter outlining the case for change, the person said.
That full 23-page letter from Elliott to AT&T can be found here.
Elliott Management is perhaps best known to Hollywood audiences as a backer of Ryan Kavanaugh’s Relativity studio. Dune Capital bought out much of those holdings in 2014. Relativity first filed for bankruptcy in 2015.