Billionaire Hedge Fund Manager Loading Up on AT&T Inc.; Here’s Why

Legendary Investor Just Bought $3.2 Billion of AT&T Inc.

If you want to make a lot of money in the stock market, it pays to follow this type of investor: shareholder activists.

Shareholder activists fight for changes at poorly managed companies. They can pressure firms on anything from dividend hikes and asset spin-offs to throwing out under-performing executives. And as we have pointed out in situations like Nestle SA (ADR) (OTCMKTS:NSRGY, SWX:NESN) and Whole Foods Market, Inc., that can serve as a catalyst for explosive returns.

In the crosshairs today: AT&T Inc. (NYSE:T). On September 9, billionaire Paul Singer disclosed a $3.2-billion stake in the company. And in an open letter to AT&T’s board of directors, the hedge fund honcho chastised Chief Executive Officer Randall Stephenson’s track record and he proposed options to unlock value. (Source: “A Letter to AT&T,” Activating AT&T, September 9, 2019.)

Admittedly, Mr. Stephenson has made some smart calls. In 2007, just after taking on the top job, he bet big on wireless to fuel AT&T’s growth. By signing an exclusivity deal with Apple Inc. (NASDAQ:AAPL), the company exploited the “iPhone” to gain market share.

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