The Daily Dow
Thursday, July 17, 1997
by Robert Sheard
LEXINGTON, KY. (July 17, 1997) -- Just when you think things might be at their lowest point, AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> drives another stake into its own heart. In an ominous sign for investors' confidence in management, John R. Walter, the president and reported successor to CEO Robert E. Allen, resigned yesterday after only some nine months with AT&T.
Walter resigned after discussions with the board of directors during which "it became clear that the board was not ready to elect him to [the CEO] office on the schedule originally discussed with him."
Let's review: the company brings Walter in last October to groom him for succession to the throne. AT&T launches an unlikely bid to merge with SBC Communications, a possibility so riddled with regulatory holes that it was almost DOA when it was announced. During the entire process, Allen continued to give mixed signals, publicly claiming that the plans for Walter to succeed him were unchanged, yet seeming to undermine him with conspicuously absent signs of real support.
Walter also got torpedoed by the directors, specifically Walter Elisha, chairman and CEO of Springs Industries Inc., who reportedly doubted Walter's "intellectual leadership" and wondered aloud if the company "erred in asking him to take on this responsibility in the first place."
Add this compounded blunder to the original purchase of NCR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NCR)") else Response.Write("(NYSE: NCR)") end if %> and then the spin-off of the company's best division, now LUCENT TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %>, and one has to wonder how many more management blunders lie in store before the company turns itself around. It's actually a little amazing that the stock is only down 16% this year given this kind of leadership. It won't be long before the press start making up their own new names for the company. I'll start: how about Aptly Torn & Tattered? Absolute Terror & Torment? All Thumbs & Tears?
Another bad day for Dow investors holding Ma Bell.
(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________
Stock Change Last -------------------- T -1 1/4 35.00 GM +1 55.38 CHV - 3/16 77.38 MMM -2 3/16 99.81
Day Month Year
FOOL-4 -1.37% 0.35% 2.52%
DJIA -0.23% 4.42% 24.39%
S&P 500 -0.53% 5.25% 25.77%
NASDAQ -0.75% 8.79% 21.51%
Rec'd # Security In At Now Change
1/2/97 120 3M 83.00 99.81 20.26%
1/2/97 153 Chevron 65.00 77.38 19.04%
1/2/97 179 Gen. Motor 55.75 55.38 -0.67%
1/2/97 479 AT&T 41.75 35.00 -16.17%
Rec'd # Security In At Value Change
1/2/97 120 3M 9960.00 11977.50 $2017.50
1/2/97 153 Chevron 9945.00 11838.38 $1893.38
1/2/97 179 Gen. Motor 9979.25 9912.13 -$67.13
1/2/97 479 AT&T 19998.25 16765.00 -$3233.25
CASH $767.60
TOTAL $51260.60