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It's important to bring up that in the last year AT&T bought Time Warner, Direct TV, and other media companies, as well as As Tech pioneer AppNexus to try and m

It's important to bring up that in the last year AT&T bought Time Warner, Direct TV, and other media companies, as well as As Tech pioneer AppNexus to try and merge Digital, OTT, and linear advertising all together in an effort to make up ground on Google and Facebook

o_nlogn_420 8y ago
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manigandham 8y ago
They're already failing at that with nonsensical rebrands and rotating leadership. You can't compete with the giants by buying a bunch of companies and strapping their products together. That just leads to a dysfunctional mess. They need to build from scratch with a focused approach as seen with The Trade Desk, but their corporate politics won't let that happen.
adventured 8y ago
AT&T is about to be the next GE. The acquisitions are the desperate flailing before the spiral down (GE did the same thing, it's all financial engineering with minimum real sustainable strategy). They're spending $8 billion per year just on debt interest now with very little organic growth in their business. $170 billion in long-term debt with only $8 billion in cash. Negative $128 billion in net tangible assets. And a very rich dividend to maintain. Eerily similar to GE's doomed setup. ~80% of their income is going to the debt and the dividend, which is a foreshadowing of the debt vs investor value battle that is looming. When they're forced to slash that dividend, the stock tanks, the rest of the process unspools quickly. Once debt of that magnitude grows larger than their market cap - as a signal of inbound distress, it's pretty much a point of no return for mega cap companies. They'll cross that line with the next recession (or sooner) and will never fully recover thereafter, ending in bankruptcy or piecemeal liquidation. I'd bet on their debt interest costs nearly catching up to their net income in the next six or seven years.

o_nlogn_420 8y ago

Ad Tech

manigandham 8y ago

They're already failing at that with nonsensical rebrands and rotating leadership. You can't compete with the giants by buying a bunch of companies and strapping their products together. That just leads to a dysfunctional mess. They need to build from scratch with a focused approach as seen with The Trade Desk, but their corporate politics won't let that happen.

adventured 8y ago

AT&T is about to be the next GE. The acquisitions are the desperate flailing before the spiral down (GE did the same thing, it's all financial engineering with minimum real sustainable strategy). They're spending $8 billion per year just on debt interest now with very little organic growth in their business. $170 billion in long-term debt with only $8 billion in cash. Negative $128 billion in net tangible assets. And a very rich dividend to maintain. Eerily similar to GE's doomed setup. ~80% of their income is going to the debt and the dividend, which is a foreshadowing of the debt vs investor value battle that is looming. When they're forced to slash that dividend, the stock tanks, the rest of the process unspools quickly. Once debt of that magnitude grows larger than their market cap - as a signal of inbound distress, it's pretty much a point of no return for mega cap companies. They'll cross that line with the next recession (or sooner) and will never fully recover thereafter, ending in bankruptcy or piecemeal liquidation. I'd bet on their debt interest costs nearly catching up to their net income in the next six or seven years.