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AT&T (T) Reportedly Mulling Over DirecTV, U-Verse Divesture
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According to industry grapevines, AT&T Inc. (T - Free Report) is reportedly contemplating the divestment of a significant minority stake in the pay-TV business comprising DirecTV, AT&T TV Now and U-Verse. Undisclosed sources privy to the discussion have revealed that the assets are likely to be sold to private equity firm TPG for as much as $15 billion. This is likely to help the carrier offload a struggling business and focus more on core businesses while reducing its debt burden. However, no official statement has yet been made by any of the firms involved in the negotiation process.
AT&T acquired DirecTV in 2015 for a total consideration of $67.1 billion (including assumed debt) to extend its footprint beyond the realms of the wireless business into the pay-television industry. However, the business did not live up to expectations and began to lose subscribers with the emergence of online streaming services of avant-garde media firms like Netflix, Inc. (NFLX - Free Report) , The Walt Disney Company (DIS - Free Report) , Hulu and Amazon.com Inc. (AMZN - Free Report) .
Notably, AT&T lost about 3 million video customers in 2020 and recorded $15.5 billion impairment charges on its pay-television business. With users shifting to Internet video services, AT&T intends to focus more on video streaming content. Evolving consumer preference for digital and subscription services over linear pay television and rental or outright purchase has compelled various media firms to alter their business models and AT&T is possibly moving in that direction, focusing more on streaming services like HBO Max.
To add to the woes, AT&T amassed a huge debt burden with the acquisition of Time Warner assets and as of Dec 31, 2020, it had a long-term debt of $153,775 million. The company is continuously embarking on a slew of corporate initiatives to reduce its staggering debt pile and de-risk its capital structure to better navigate through the coronavirus-induced global turmoil. AT&T also cancelled its stock buyback program due to the severity of the coronavirus outbreak. The company refinanced or repaid debt through make-whole redemptions, tender offers or repayment of scheduled maturities.
AT&T is evolving its distribution channels for changing customer demands and emphasizing on self-installation and software-based platforms to redefine its business plans for the virus outbreak. While optimizing operations, it is aiming to increase efficiencies to lower costs while supporting employees and customers with various financial packages.
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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AT&T (T) Reportedly Mulling Over DirecTV, U-Verse Divesture
According to industry grapevines, AT&T Inc. (T - Free Report) is reportedly contemplating the divestment of a significant minority stake in the pay-TV business comprising DirecTV, AT&T TV Now and U-Verse. Undisclosed sources privy to the discussion have revealed that the assets are likely to be sold to private equity firm TPG for as much as $15 billion. This is likely to help the carrier offload a struggling business and focus more on core businesses while reducing its debt burden. However, no official statement has yet been made by any of the firms involved in the negotiation process.
AT&T acquired DirecTV in 2015 for a total consideration of $67.1 billion (including assumed debt) to extend its footprint beyond the realms of the wireless business into the pay-television industry. However, the business did not live up to expectations and began to lose subscribers with the emergence of online streaming services of avant-garde media firms like Netflix, Inc. (NFLX - Free Report) , The Walt Disney Company (DIS - Free Report) , Hulu and Amazon.com Inc. (AMZN - Free Report) .
Notably, AT&T lost about 3 million video customers in 2020 and recorded $15.5 billion impairment charges on its pay-television business. With users shifting to Internet video services, AT&T intends to focus more on video streaming content. Evolving consumer preference for digital and subscription services over linear pay television and rental or outright purchase has compelled various media firms to alter their business models and AT&T is possibly moving in that direction, focusing more on streaming services like HBO Max.
To add to the woes, AT&T amassed a huge debt burden with the acquisition of Time Warner assets and as of Dec 31, 2020, it had a long-term debt of $153,775 million. The company is continuously embarking on a slew of corporate initiatives to reduce its staggering debt pile and de-risk its capital structure to better navigate through the coronavirus-induced global turmoil. AT&T also cancelled its stock buyback program due to the severity of the coronavirus outbreak. The company refinanced or repaid debt through make-whole redemptions, tender offers or repayment of scheduled maturities.
AT&T is evolving its distribution channels for changing customer demands and emphasizing on self-installation and software-based platforms to redefine its business plans for the virus outbreak. While optimizing operations, it is aiming to increase efficiencies to lower costs while supporting employees and customers with various financial packages.
We are impressed with the focused attempts of this Zacks Rank #4 (Sell) stock to maintain a competitive edge amid these turbulent times. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>