AT&T has hit a 12-year low. Yes, 12 year low. The telecom giant was always considered a big player in the US stock market, and is likely to be featured in many portfolios all across the US? So what happened? Over the past five years, they have lost 40% in value.
We can look at three big mistakes that AT&T might have done. First, they bought DirecTV for $49 billion in 2015. In hindsight, a transaction that has not been extremely beneficial. Then they acquired another giant in Time Warner for $85 billion in 2018. Here, they tried to build a streaming media ecosystem, something they are still working on 3 years later.
And while they were busy fighting the media expansion battle, AT&T dropped the ball in its wireless business. T-Mobile's deal with Sprint has put them ahead of AT&T for the second-biggest wireless carrier in the US. Will AT&T bounce back in the wireless industry? Or will they keep fighting in the media industry?
The good news is that AT&T is taking the right steps to bounce back. They have decided to spin off Warner Media and DirecTV into other stand-alone companies. They also divested several of their smaller businesses. This allows AT&T to focus on what matters, and that is adding value to their shareholders. The stock is down 20% this year, and many traders are looking at it as a good buy right now.
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