The Verdict Is Still Out On AT&T
Leaving a recent meeting with AT&T's new chief, C. Michael Armstrong, at the company's Basking Ridge, N.J., base of operations, cable magnate John Malone turned to an aide and said, "I've met every AT&T chairman since 1964, and this is the first one that gets it."</br></br>It appears Wall Street is feeling the same vibes.</br></br>Since tapping Mr. Armstrong, the former chief executive of Hughes Electronics, to be its new chairman in October, AT&T has seen its stock price rocket 44%, giving Ma Bell a stock-market value of $105 billion and a more valuable currency for doing deals.</br></br>But what has Mr. Armstrong, a onetime senior executive of International Business Machines who pushed Hughes into the satellite-TV business, done to warrant all the investor enthusiasm? Not much, at least not publicly. AT&T still faces the fight of its life in the coming year in everything from local-phone services to the Internet, which means its current stock runup may be short-lived.</br></br>Some of the most prominent analysts who follow the stock are witholding their endorsements. Jack Grubman of Salomon Smith Barney and Daniel Reingold of Merrill Lynch & Co. have set neutral and hold ratings, respectively. Under Mr. Armstrong, AT&T still faces the same challenges that sat like an elephant on its stock price under his predecessor, Robert E. Allen Jr.