<< In what capacity did you involve with AT&T? >>
As an investment advisor who, prematurely, as it turns out, got clients into AT&T -- based upon Walter's becoming CEO.
<< I don't think Allen was the best CEO, but I
don't think he was the worst either. He did have a vision about
merging computing and communication - just that he bought the
wrong computer company to begin it. >>
It would have been the "right" computer company had a competent CEO, like Lou Gerstner, been running the show (IBM was one of my correct turnaround calls -- they're not all wrong).
<< He seems very flexible to me in
that as soon as deregulations set in, he reversed course to concentrate
on his main business. >>
Allen sold off the world's preeminent research lab, at precisely the time that technological breakthroughs would be necessary to justify AT&T charging a premium in a business that is increasingly becoming commodity-like. He spent half a billion on consultancy services that were a complete waste. He announced massive layoffs and collected huge bonuses for himself while the company moved sideways and the stock moved down, then backed off from the layoffs -- creating a PR disaster all around, after which it became increasingly difficult to bring about the necessary layoffs (AT&T's revenues per employee are way below that of MCI and Sprint). The SBC talks were a farce conducted to make Allen appear "visionary", and undermine Walter. Allen's plan was that he would have to stay to help meld the two companies together. But, anyone remotely familiar with the original Bell breakup, and all the controversial mergers taking place at the time, knew that the Justice Dep't wouldn't dream of allowing such a merger at that point.
<< About
Walter, it was so unfortunate - but the whole board should take the
blame for that. >>
We agree on the last statement. Shareholders, imo, should sue both Allen *and* the board. But, "unfortunate" is when you step off the curb and get run over by a drunken cab driver. There was more human design here than the term "unfortunate" would imply. The board, to their discredit, allowed Allen to conduct the search that led to Walter. Candidates with more telco-saavy than Walter stayed away because they knew Allen would poison their tenure, as he had with other "heir apparents" (Mandel, etc.). Allen's insistence on Walter, who lacked telco experience, was a transparent attempt to remain in charge, since a telco newbie like Walter would need a mentor. But, Allen, notoriously, had never mentored anyone that might someday replace him. The board knew this, and then, only a few months later, unceremoniously dumped Walter for lacking "intellectual leadership".
Allen wasted vast sums on NCR and videophone. Allen announced grandiose plans for rolling out local telco service in all 50 states, though this would have been a disaster, given the current regulatory muddle. Allen failed to make really important international alliances, though this was clearly necessary. The list goes on and on.
<< We will never know how Walter would have fared
there. >>
The word from employees was that AT&T had regained a sense of teamwork under Walter that hadn't been seen over the previous 20 years. T was becoming a company again, instead of the loose confederation of independent fiefs it had devoloved into under Allen. Non-team players (like Nacchio) were shown the door. But there was one non-team player Allen's cronies on the board wouldn't dispense with: Allen.
This isn't meant as an attack on you, and I apologize if it sounds that way. We all have opinions -- that's what makes a Market. My attack is on Allen and the board. And, I am not alone. People on these threads say anything they want. But, the WSJ does not attack important advertising clients, and major Wall Street houses do not attack major underwriting clients, for casual reasons -- and their attacks on Allen and the T board have been as strong as anything I have ever read concerning a major U.S. corporation.
IBM was just as bad off as T a few years back, and GM (another one of my calls) was far, far worse off. Yet, though they both have a long way to go, they are both returning vast sums of cash to shareholders in the form of buybacks -- while AT&T is for the first time going to be free-cash-flow negative. This wasn't just misfortune, it was misfeasance by Allen and T's board.
All of this is by way of explaining why I won't go near SGI until I am sure that McCracken, a much better man than Allen, is, nevertheless, leaving SGI. Are we sure he is really leaving? If so, please let me know, because I would like to take a position in the stock.
porc--''''> |
