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Report: AT&T Exploring Sale Of DirecTV Unit

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Report: AT&T Exploring Sale Of DirecTV Unit

AT&T Inc. (NYSE: T) is evaluating a sale of its satellite business DirecTV, which would mark a departure from a prior corporate strategy, The Wall Street Journal reported.

AT&T acquired DirecTV in 2015 and now is considering multiple strategic alternatives, including a spinoff of the satellite TV business or selling assets to rival DISH Network Corp (NASDAQ: DISH), sources told WSJ.

AT&T management has previously argued its DirecTV business is part of a portfolio of products and services that gives the company the necessary size and scale to compete in the entertainment and advertising spaces.

Why It's Important

However, activist investor Elliott Management's recent disclosure of a $3.2 billion stake in AT&T came with a public letter urging the company to divest its DirecTV business. Elliott Management argued the acquisition resulted in "damaging results" and calls into question AT&T's "ability to execute."

While DirecTV hasn't been immune from the broader cord-cutting trend, WSJ said the business still contributes large volumes of cash flow and customer accounts. The contributions helped AT&T better manage its debt load and prompted other investments in the rest of the company.

AT&T's stock was marginally higher at time of publication after closing at $36.76 per share.

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