Early call on AT&T shows analysts' power
Article Abstract:
AT&T's stock suffered losses after Salomon Brothers analyst Jack B. Grubman issued a negative report on the company in the wake of the resignation of AT&T Pres Alex J. Mandl. The fluctuation, which saw the stock lose as much as $1.875, demonstrates the power that certain highly regarded analysts can wield. The report was issued to Grubman's clients before AT&T released the news. Grubman and Mandl have close ties, and some AT&T officials believe that the note, in which Grubman claimed that Mandl's departure might significantly disrupt AT&T's management and might indicate more substantial problems at the company, was a way for Grubman to praise his friend. Mandl denied that he spoke with Grubman about his decision to leave AT&T, and he said that he was upset by Grubman's criticism of AT&T's management. In an unusual move, Grubman released a second report stating that the initial note might have been too harsh. AT&T's shares later recovered to close up at $54.375 on Aug 21, 1996.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1996
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AT&T's cards caught in shift to deregulation
Article Abstract:
The Telecommunications Act of 1996 was intended to benefit consumers by inspiring competition, but one initial side effect has been to decrease the convenience with which consumers can use AT&T's long-distance calling cards. The legislation allowed AT&T to enter the local phone service market, and AT&T has severed contracts with five of the seven Regional Bell Operating Companies (RBOC), with plans to end contracts with the other two pending. As a result, consumers must first dial 1-800-CALL-ATT when using the AT&T cards, an inconvenient process. Nynex filed suit against AT&T for an ad campaign that allegedly implies the inconvenience is the fault of Nynex. Some RBOCs have leagued with other long distance companies, issuing easier-to-use cards that require the consumer to dial only 0 before placing their call.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1996
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