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Illustration: Sarah Grillo/Axios

Activist investor Elliott Management this morning disclosed a $3.2 billion stake in AT&T, making it the telecom giant's 6th largest shareholder.

Why it matters: This is a boomerang on AT&T CEO Randall Stephenson's argument to regulators when buying Time Warner, that his company is now competing with tech giants like Amazon and Netflix. Elliott agrees, which is why it doesn't think a veteran telecom guy like Stephenson should still be in charge.

Elliott believes that AT&T shares have underperformed for the past decade and pins much of the blame on its strategy of building a conglomerate in an age of vertical focus. This includes criticism of its deals for:

  • T-Mobile: "The most damaging deal was the one not done," because the record breakup fee gave T-Mobile the capital to become a viable competitor.
  • DirecTV, which Elliott believes is a business in secular decline. This might be one AT&T already agrees with, as we've been hearing divestiture rumblings (perhaps reflected by AT&T switching the name of its skinny bundle from DirecTV Now to AT&T Now).
  • Time Warner, which Elliott calls a "spectacular company" that AT&T hasn't given a "clear strategic rationale" for owning.

Sources close to the situation say that Elliott began seriously digging into AT&T about a year ago, which also was around the time a judge allowed the Time Warner merger to go through. The hedge fund does believe there are divestiture opportunities, but, again, this is more about wanting management changes.

  • AT&T recently promoted John Stankey to its No. 2 role and heir apparent to Stephenson, but he's another executive with telco roots.
  • Elliott wants someone with a Silicon Valley pedigree — figuratively, not geographically — and doesn't make today's move if it hasn't already talked to a few possible candidates.

What they're saying: AT&T issued a statement on the news ...

"Our management team and Board of Directors maintain a regular and open dialogue with shareholders and will review Elliott Management’s perspectives in the context of the company’s business strategy. We look forward to engaging with Elliott. Indeed, many of the actions outlined are ones we are already executing today."

Go deeper: Activist investors are poaching opportunities from private equity

Editor's note: This story has been updated to include additional information and analysis.

Go deeper

Students vandalize and steal from schools for viral TikTok challenge

TikTok logo displayed on a phone screen in Krakow, Poland on July 18, 2021. Photo: Jakub Porzycki/NurPhoto via Getty Images

A viral TikTok challenge is leading students nationwide to shatter mirrors, steal fire alarms and intentionally clog toilets, The Washington Post reports.

Driving the news: Dubbed the the “Devious Licks challenge, students are showing off their "devious licks" on TikTok — with a sped-up version of "Ski Ski BasedGod" by rapper Lil’ B playing in the background.

Axios-Ipsos poll: People of color face more environmental threats

Expand chart
Data: Axios/Ipsos poll; Note: ±2.5% margin of error; Chart: Sara Wise/Axios

Americans of color are much less likely than white Americans to experience good air quality or tap water or enough trees or green space in their communities, and they're more likely to face noise pollution and litter, a new Axios-Ipsos poll finds.

The big picture: Our national survey shows Black and Hispanic Americans are more likely than their white counterparts to live near major highways or industrial or manufacturing plants — and to have dealt in the past year with water-boil notices or power outages lasting more than 24 hours.

18 hours ago - Health

FDA advisory panel recommends Pfizer boosters for those 65 and older

A healthcare worker prepares a dose of the Pfizer-BioNTech Covid-19 vaccine at the Key Biscayne Community Center on Aug. 24, 2021. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

A key Food and Drug Administration advisory panel on Friday overwhelmingly voted against recommending Pfizer vaccine booster shots for younger Americans, but unanimously recommended approving the third shots for individuals 65 and older, as well as those at high-risk of severe COVID-19.

Why it matters: While the votes are non-binding, and the FDA must still make a final decision, Friday's move pours cold water on the Biden administration's plan to begin administering boosters to most individuals who received the Pfizer vaccine later this month.