AT&T Shares Up Amid Speculation of Management Change
New York, Sept. 13 (Bloomberg) -- AT&T Corp. shares rose 4.1 percent, the biggest gain in two months, on speculation cable television pioneer John Malone will succeed C. Michael Armstrong as chief executive of the No. 1 U.S. long-distance phone company.
AT&T rose 1.25 to 31.88 in New York Stock Exchange trading of 25 million shares after earlier touching 30.13. The shares rose suddenly about 2:30 p.m. New York time when Briefing.com, a financial news Web site, said there was talk that Malone, an AT&T director who ran Tele-Communications Inc. before it was acquired by AT&T, would take over for Armstrong. The shares rose to 32.75 a half-hour before regular U.S. markets closed.
AT&T shares have fallen 37 percent so far this year and are down from a 52-week high of 61. They were at 30.13 when Armstrong became CEO in October 1997. The stock has been battered by concerns over the slumping long-distance business and Armstrong's $100 billion cable TV bet, which has yet to pay off.
``Ma Bell shares lurch out of the red as rumors circulate that John Malone to take over reins from Armstrong,'' said a posting on Briefing.com. No sources were cited.
Vivian Carr, a Liberty Media Corp. spokeswoman, said there is ``no truth to the rumor'' that Malone will become AT&T's chief executive. Malone is chairman of Liberty Media, which owns AT&T's cable programming assets.
David Caouette, a spokesman for New York-based AT&T, declined to comment, citing a longstanding policy of not commenting on rumors. AT&T is the No. 1 U.S. cable TV operator.
AT&T Strategy
One investor said the replacement of Armstrong wouldn't make sense.
``Malone will essentially have to pursue Armstrong's strategy,'' Jean-Marc Berteaux of John Hancock Funds said. ``I don't see a big difference between the two in terms of what they have to do.''
Armstrong took over New York-based AT&T on Nov. 1, 1997. Since arriving, AT&T bought cable-TV operators Tele-Communications and MediaOne Group Inc. Still, sales growth in wireless and cable TV isn't making up for declining long-distance prices, resulting in slower total sales increases. The company said twice that 2000 profit would fall short of analysts' estimates.
Sep/13/2000 20:17 ET
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