CNN Makes Huge Announcement While Trump Scoffs
President Trump is ecstatic over the news from Elliott Management’s announcement that AT&T now owns a massive share of Time Warner which CNN is a part. It is no secret as to how CNN has posted “Fake News” and how the president feels about CNN and the news anchors. He is hopeful to see changes in the news network with the new investor.
Trump tweeted after finding out the news Monday morning, “Great news that an activist investor is now involved with AT&T. As the owner of VERY LOW RATINGS @CNN, perhaps they will now put a stop to all of the Fake News emanating from its non-credible “anchors.” Also, I hear that, because of its bad ratings, it is losing a fortune. As bad as @CNN is, Comcast MSNBC is worse. Their ratings are also way down because they have lost all credibility. I believe their stories about me are not 93% negative, but actually 100% negative. They are incapable of saying anything positive, despite all of the great things. The Trump Administration has achieved more in the first 2 1/2 years of its existence than perhaps any administration in the history of our Country. We get ZERO media credit for what we have done, and are doing, but the people know, and that’s all that is important!”
“But the people know, and that’s all that is important.” Yes, the people know, and we are tired of the “fake news” just as much as the president is. It makes a person sick who loves this country to see so much “nasty” in the media. If the president is excited and happy about the change, then we should be as American citizens too! This morning AT&T soared after the announcement was made that they now own $3.2 billion worth of stock and may end up worth $60 per share by 2021.
They now own Time Warner which CNN is part of as stated in the letter put out this morning as an announcement. Elliot believes Randall Stephenson, the CEO of AT&T will exit his position soon. The memo said, “The purpose of today’s letter is to share our thoughts on how AT&T can improve its business and realize a historic increase in value for its shareholders. Elliott believes that through readily achievable initiatives, increased strategic focus, improved operational efficiency, a formal capital allocation framework, and enhanced leadership and oversight, AT&T can achieve $60+ per share of value by the end of 2021. AT&T has been an outlier in terms of its M&A strategy: Most companies today no longer seek to assemble conglomerates. We firmly believe that AT&T’s M&A strategy has not only contributed directly to its profound share price underperformance but has also caused distractions that have contributed to the Company’s recent operational underperformance.”
There were concerns raised about AT&T acquiring Time Warner by the Elliott team and warned AT&T, “AT&T has yet to articulate a clear strategic rationale for why AT&T needs to own Time Warner.” AT&T responded to the letter stating, “Its management team and Board of Directors maintain a regular and open dialogue with shareholders and will review Elliott Management’s perspectives in the context of the Company’s business strategy. We look forward to engaging with Elliott. Indeed, many of the actions outlined are the ones we are already executing today. AT&T’s Board and management team firmly believe that the focused and successful execution of our strategy is the best path forward to create long-term value for shareholders.”
AT&T purchased Time Warner for a total of $85 billion and is now one of the largest deal-making acquisition in history. Critics claim and reminded AT&T of their outstanding $180 billion in debt, which is now 12 percent higher. The CEO of Time Warner, Jeff Bewkes, is the one responsible for selling over to AT&T called the deal, “a fairly suspect premise.” He stated, “We aren’t alone in our cautious outlook.” The letter of the announcement also stated, “While it is too soon to tell whether AT&T can create value with Time Warner, we remain cautious on the benefits of this combination.”
Jonathan Chaplin, a New Street Research analyst, is skeptical and stated, “I honestly don’t believe that there are synergies between the wireless business, the TV distribution business, and the media business.” The bottom line is there are skeptics all across the board. If they can bring CNN to better and more truthful news stories, then it is well worth the change of management and ownership.