Intel is spending $20B to build two new chip manufacturing facilities in New Albany Ohio. Seems like "chump change" when compared to T's debt of $135B. Makes you wonder what Stephenson and Stankey were thinking, way over paying for DTV and WM. Neither of these bafoons will live to see T's debt reduced to zero.
12 replies (most recent on top)
Stankey and Stephenson were simply playing poker with borrowed assets.
You could not have done any worse (financially) at acquiring companies if you tried. Stephenson and Stankey had their lunch money taken away by a bunch of bullies. What a couple of losers.
Keep complaining about the same old thing. Its gonna work out for you. Soon. Any day now.
Intel long term debt for the quarter ending June 30, 2022 was $32.548B
Also $6B plus spectrum for TMUS.
AT&T Acquires Multiple Companies from 1997-2015 (Drop of $200B in share equity value on overpriced or outright bad deals)
For a collection of deals over two decades, the duo of Whitacre and Stephenson at AT&T reign supreme in total bad deals by spending $340B in equity on a series of deals (summary below) to have a remaining firm equity value of $140B.
Two deals alone, Ameritech and Bell South, involved an equity use in total greater than AT&T's market capitalization today.
An additional oddity is that much of the management and Board that approved these horrendous deal still remain at T.
AT&T - A HISTORICAL DEAL ACQUISITION PERSPECTIVE
Deal $'s represent equity used in acquisitions (assumption of debt the typical arrangement).
1997 Starting Point - SBC $40B market cap
1997 - Buys Pacific Bell $17B
1998 - Buys SNET $4B
2000 - Buys Ameritech $81B
2004 - Buys AT&T Wireless $24B (60%)
2005 - Buys AT&T $16B
2006 - Buys Bell South $67B
2015 - Buys DTV $49B
2016 - Buys Warner $85B
Total counting starting point - $383B
Less Warner spinoff -($43B)
Net: $340B
Market Cap after Warner spinoff $140B
Equity Shrinkage $200B
I remember well, "If we don't get into media and distribution, we will be managing decline". If Stankey had not been so arrogant, who knows, T could have stood a chance.
Starts with an utility’s mindset and attempted to transform into a media giant by buying companies.
The buying part was supported by easy credit market and cash flow. The transforming part fell on its face with Stanky declared himself the smartest person in media.
The merger never had a chance with Randy and Stanky in charge. DTV and WM CEOs were paid millions to retired. Shareholders were robbed, workers lost jobs, journalists asked nothing but softball questions, and no one is held accountable.
Let’s not forget special bonuses were given on close of both deals. Also hatred of T-Mobile and John legere and egos involved. Legere crushed them against all odds.
" ... wonder what Stephenson and Stankey were thinking ..."
No need to wonder. They explained it -- they were looking for "revenue" growth. They could not think of growing the company any other way - # of subscribers are kind of at an equilibrium level. No more Telco's to buy - Big Ed swept the field. Of course, they would have still made their millions even if the company did not grow. A combo of ego, market expectations, board's stupidity -- all contributed to fatal decisions. They deserve blame for their impatience. However, Wall Street - with its perverse incentives is the deep culprit, not only in the case of RS/JS decisions but also in lopsided market valuations and ever-growing inequality. Change the incentives and puppets will dance to a different tune.
Hopefully Stankey will not be able to obtain anymore credit on behalf of T. That is the only way to keep him in check so he can't try to acquire anymore companies. He has ruined many employees lives and destroyed a once iconic 150 year old company. Can't believe the BOD still have confidence in this guy to lead T. He cannot continue to sell T assets to bring T back to prosperity.
It was a major mistake and astounding there were no repercussions to decision makers — only to shareholders and those who lost their jobs. :(