AT&T CEO Randall Stephenson stood by the company’s big money media buys following scathing criticism from shareholder Elliott Management, as separate details emerged of a lawsuit claiming it artificially inflated user numbers on its DirecTV platform.
During an investor conference, the executive (pictured) directly addressed comments made by shareholder Elliott Management, which last week attacked the company’s M&A strategy including questioning why it needed to own content assets Time Warner and broadcast proposition DirecTV.
“We think a company that can put together premium media, content creation and production with networks would have a significant strategic advantage,” Stephenson said, highlighting the strength of its proposition across the digital content and media sector.
However, he did concede some of the points made by Elliott would be “looked at” and the company would be actively engaging with the shareholder.
Stephenson’s comments came days after further details emerged on a class action lawsuit being filed against AT&T. The case is based on accusations it misled investors by artificially inflating the number of users on its DirecTV platform by “promoting and rewarding account fraud”.
In the filing, those suing the company claim AT&T’s sales staff employed misleading sales tactics to increase the number of subscribers to the service. Other allegations include the product being pushed onto employees and being the subject of aggressive promotions.
They claim the statements made from executives neglected to accurately outline the position and prospects of the service, misleading to investors and impacting AT&T’s share price.
The filing stated: “Statements that DirecTV Now would be profitable were materially false and misleading and omitted to disclose that DirecTV Now was not going to be a profitable product with positive margins but would instead be sold at irrationally low prices and with heavy and improper promotional activity.”
AT&T vowed to fight the suit it described as “baseless”.