In response to a news earlier this month that some of the top network providers in the country left thousands of cables covered in lead in numerous sites around the United States, AT&T stock dropped to its lowest level since 1993 on Tuesday, compounding its losses.
According to a July 9 Wall Street Journal article, businesses like Verizon and AT&T left telephone network wires from the Bell System coated in lead in the ground, the water, and on transmission poles in the US.
This led to a rush of analyst downgrades, which in turn sparked a sharp sell-off in telecom equities. Since the investigation’s publication, shares of AT&T, Verizon, and Frontier Communications have all declined by at least 14%.
Last Friday, JPMorgan Chase analysts dropped their price objective for AT&T from $22 to $17 and downgraded the company from overweight to neutral, citing, among other reasons, their view that the potential liability is an unquantifiable, long-term overhang for the stock.
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AT&T’s Stock Plummets as Inquiry and Calls for Action Increase
More downgrades hit Wall Street on Monday, which led to further destruction. On Monday, Edward Jones analyst David Heger lowered AT&T’s rating from buy to hold out of fear that the inquiry would impede stock growth and lead to legal action against the corporation.
On Tuesday, AT&T’s stock dropped to $13.45, its lowest closing price since 1993. An AT&T representative informed CNN via email that the company is carrying out additional testing, including at the sites named in the Journal’s reports.
This comes after the business claimed that the Journal’s testing procedures are defective and that its reporting clashes with the company’s own testing in a response to the probe.
Following the announcement, lawmakers have called for measures to look into the network of hazardous lead wires even more.
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Source: edition.cnn.com