In terms of pulling the wool over investors eyes that is!
The company is hemorrhaging customers left and right without a credible plan to effectively compete with better run media businesses. Randall gave a nice spin on things today driving the stock up while investors failed to realize that a company with no customers (and no workers if Randall has his way) and tons of debt with little to show for it other than failed businesses is NOT a smart investment.
Stock buybacks means no growth whatsoever. There is no connection to growth, positive or negative. But, it does mean that there is less stock sharing in the ownership of T, so everything else the same, the price of the stock should grow.
What has changed is the Federal Reserve. While they were hiking rates, Randy was intent on paying off debt. Now that they have lowered interest rates, and are poised to lower them tomorrow below the rate of inflation, share buybacks become more attractive compared to paying down debt.
It is in accordance with the Federal Reserve's real mandate, which is to maintain an asset bubble in the stock market. After all, it benefits the 1%, which is who they work for. AT&T will hardly be the only indebted corporation buying back stock as opposed to paying down debt.
Stock buybacks do that. Doesn’t mean real growth. Basically they buy back stocks, cut costs and forget about innovating and growing the business. It’s the latest fad that’s been going on forever now. Randy and crew just finally caught up. Wall st loves it, execs love it as I pads their pockets. Reality is it’s a sham. It’s only financial innovation, not real growth.
At the very least he won’t go around blowing money he doesn’t own and have buying obsolete technology companies for half assed plans. The employees from those potential acquisitions can at least sleep better at night knowing the Death Star passed them buy and they don’t have to go through what the rest of us have.
Not sure what Randy will or will not do; but, there is one thing for sure.
He will be sitting on the beach in some swanky place counting his money while laughing his a$$ off come 2021.
Enron was a bunch of amateurs cooking the books compared to this company.
Randy said he would buy back stock, pay down debt, and not make any acquisitions. I read out of that, the dividend is secure. Meanwhile, the Fed is poised to lower interest rates on Wednesday. I don't think investors got it wrong at all.