at&t
13
Oct

AT&T Loses Subscribers And Lowers Forecast, Shares Careen Lower

AT&T got punched in the scrotum today, hard, off by about 6% on news that the hurricanes last month shaved a good $90 million off their expected top line for the quarter. Given that T is a stable dividend paying telcom that barely moves 1% on a good day, 6% is a monumental decline.

Normally, I wouldn’t really give a shit about some languishing American telcom, but this so happens to be one of the holdings in my long term portfolio. What is even more vexing is that the slow and steady climb higher from $35 to mid $39s that took place over the course of a month was unwound in one fucking day. Surprisingly, I am still up on the position, albeit just a touch.

At this level, I am somewhat tempted to add to the position, as it is in the interest of too many to see this stock higher over the next few months. By year end, the acquisition of TWX is scheduled to close and the final deal price will be defined by the price T is trading at that time, measured through thresholds of upper and lower collars. Should the price of T close below the lower collar in that range, which stands at $37.41, the deal would become a lot more expensive for AT&T. By hook or by crook, it will be higher than $37.41 by December.

The only thing holding me back is the thought of throwing more money at an under-performing telcom, which makes no sense in a hot bull market fueled by technology co’s.