AT&T Shares Hit Three-Decade Low Amid Decline in Cable TV Subscribers and Landline Usage

Shares of telecommunications giant AT&T plunged to their lowest level in three decades as the company grapples with a sharp decline in traditional cable television subscribers and the diminishing use of landlines. The company’s stock is on track for its weakest finish since March 24, 1993, with shares trading at levels not seen since then.

Year-to-date, AT&T shares have plummeted over 26%, following a significant decline of approximately 34% over the past 12 months. The downward trend has been driven by various factors, primarily the increasing phenomenon of cord cutting, as consumers shift away from traditional cable TV services. This trend has adversely affected AT&T’s long-term prospects and contributed to the negative sentiment among investors.

David Russell, the VP of market intelligence at the TradeStation Group, expressed concerns over AT&T’s outlook, stating, “Investors were already sour on AT&T’s long-term prospects because of cord cutting, and this lead-cable story could be the straw that broke the camel’s back.” The recent report by The Wall Street Journal revealing miles of toxic cables deployed by U.S. telecom companies underground, underwater, and on poles has added to the challenges faced by AT&T. These aging landline networks, once valuable assets, could now turn into liabilities and further burden the company’s already high costs.

AT&T shares have fallen a staggering 68.79% from their all-time closing high of $44.70 on July 16, 1999, and are down approximately 32.93% from the 52-week closing high of $20.80 on July 19, 2022. As of Monday, AT&T stock stands as the second-worst performer on the S&P 500.

The negative sentiment has also affected other telecom companies, with Verizon shares experiencing a decline in sympathy. Verizon shares hit their lowest level since September 2010, reflecting the challenges faced by the industry as a whole.

In recent times, AT&T has faced other setbacks. The company discontinued its 411 services for some customers earlier this year. Additionally, in the final quarter of 2022, AT&T agreed to pay a $6.25 million penalty to settle a Securities and Exchange Commission (SEC) lawsuit, which accused the company of selectively leaking financial information to Wall Street analysts.

Furthermore, in October of the same year, AT&T agreed to pay a $23 million fine related to a separate matter. The former president of AT&T was indicted on federal charges involving a scheme tied to former Illinois House Speaker Michael Madigan, who had been arrested earlier in the year on racketeering and bribery charges.

As AT&T grapples with declining cable TV subscriptions and the obsolescence of landlines, the company faces a challenging road ahead. The telecommunications industry, burdened by high debt from network infrastructure development, is experiencing a transformational shift in consumer preferences. AT&T’s ability to adapt and find new avenues for growth will determine its future success in a rapidly evolving market.