AT&T shares plunge to 3-decade low


AT&T’s shares fell to their lowest price in 30 years, a week after a Wall Street Journal investigation revealed it is one of several telecom companies that have left behind more than 2,000 toxic lead cables across the U.S. On Monday, AT&T’s stock dropped by 6.7% to $13.53 a share for the first time since February 1993, with a 13% decline since the report was published on July 9. The toxic-encased cables, which are remnants of the former Bell System’s telephone network, were also left by other companies, including Verizon and Frontier Communications. Their shares also dropped by 7.5% and 16%, respectively on Monday.

  • AT&T, Verizon, Frontier and Lumen’s market value has gone down by approximately $36 billion since the report, according to Dow Jones Market Data.


By Tiffany Moustakas, Editor at LinkedIn News

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Verizon and AT&T Stocks Rise, Then Waver, After Historic Selloff

Allison Joyce/Getty Images

Verizon Communications and AT&T stocks rose on Tuesday following a large selloff to start the week amid reports that the telecom titans would start testing sites for possible lead contamination.

Verizon VZ +2.57%  (ticker: VZ) stock was up as much as 5.4% on Tuesday while AT&T T –0.59%  (T) had risen 3.4%, although both shares later wavered. AT&T stock closed with a loss of 0.6% but rose 2.6% in after-hours trading. Verizon closed up 2.6% and gained 0.9% in trading after the close.

The moves come after AT&T marked its lowest close in more than 30 years on Monday, while Verizon had fallen to a 13-year low.

The stocks tumbled as analysts tried to make sense of the potential financial liability for the telecom companies after The Wall Street Journal reported on decades-old cables sheathed in lead. Citigroup analyst Michael Rollins lowered AT&T stock from Buy to Neutral/High Risk on Monday, following a similar move by J.P. Morgan.

Verizon is now testing the various sites mentioned in the Journal story for lead contamination, the firm said in an email to Barron’s. “We are taking these concerns regarding lead-sheathed cables very seriously,” the company said. AT&T also told Barron’s it is conducting additional testing.

The lead-cable-driven selloff comes on top of an already tough year for the industry as the business sees pressure from subscriber growth slowing. While social distancing during the pandemic helped boost subscriber counts for phone and internet services, penetration is now moderating.

Monday’s slide in prices may have tempted some bargain hunters to buy the dip and attractive dividend yields could have added to the shares’ appeal. AT&T offers a quarterly dividend of 28 cents, for an 8.2% dividend yield based on Monday’s closing prices, which is far above the S&P 500‘s yield of around 1.5%

That potentially long timeline may be another reason for the improved attitude among investors on Tuesday. But it would take more than one day to make a trend.


By: Karishma Vanjani, BARRONS

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