AT&T has decided to forgo its $4 billion accelerated share repurchase plan, with CFO John Stephens calling the ongoing coronavirus pandemic a time to “maintain flexibility and focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including nationwide 5G.”
The company shared the decision on Friday in a filing with the SEC.
AT&T had previously entered into an accelerated share repurchase (ASR) agreement with Morgan Stanley to repurchase $4 billion of the company’s common stock during the second quarter of 2020. That’s not happening now.
“While our business continues to operate effectively during the COVID-19 global pandemic, we have decided at this time to cancel this ASR agreement and any other repurchases to maintain flexibility and focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including nationwide 5G,” the Stephens-signed note read. “These continued investments will help ensure the company is well positioned when the pandemic passes and economies begin to recover.”
Stephens went on to say that the “impacts of the pandemic could be material,” but AT&T is “not able at this time to estimate the impact on our financial or operational results.”
“Among the factors that could impact our results are: effectiveness of COVID-19 mitigation measures, global economic conditions, consumer spending, work from home trends, supply chain sustainability and other factors,” the filing continued. “These factors could result in increased or decreased demand for our products and services and impact our ability to serve customers.”
When the U.S. stock markets opened at 9:30 a.m. ET on Friday, AT&T stock (T) sunk 9% in roughly 15 minutes.
Here’s a snapshot of what that looks like:
AT&T purchased Time Warner (and thus Warner Bros. and HBO, Turner etc.) for $85 billion back in 2018, creating WarnerMedia. The company is run by Randall Stephenson (pictured above).