After Spinning Off Warner Bros., Is AT&T Ready to Compete With Verizon?
AT&T (NYSE: T) getting into the media business didn't make much sense when it was doing the deals. Today, $170 billion in debt later, it's understandable why the company is now abandoning the space.
The carrier's $43 billion deal to merge its WarnerMedia division with Discovery Communications (NASDAQ: DISCA)(NASDAQ: DISCK) is smart, even if it causes a lot of pain for investors. After all, many income investors bought the stock for its dividend and will now see it cut in half, but they'll also own 71% of the new company.
Still, AT&T winds up back where it was before the spending spree, and the telecom industry hasn't been idle. Investors need to ask whether the streamlined carrier can effectively compete against Verizon Communications (NYSE: VZ) and still be a good investment (despite the dividend hit), or is it dead money?
Source Fool.com
