AT&T Saga Has It All as a Cautionary Investment Tale
AT&T has it all: inflated valuation, mismanaged growth, a personality cult and bad assumptions, a personality cult and bad history dealing in aquisitions
It’s tempting to dismiss the latest twists and turns in the Elliott saga as yet another illustration of the peculiarities of an individual company. But such a narrow focus would be a mistake. The AT&T debacle has broader implications for an investment world that has over-extended its romance with certain less-well-understood investment risks.
Among the many stunning latest developments is the announcement that the valuation of the non core entities to be divested have no takers in the investment market, and Randall Stephenson to be replaced as chairman l. With low demand and shrinking revenues, the AT&T saga is far from over, and it will undoubtedly be the subject of several business school cases. But already its early lessons extend well beyond the company and its investor base, offering a cautionary tale for less Informed investors who might be lured down GE path.