AT&T Inc. (NYSE:T) announced its plan to acquire WarnerMedia through a spinoff in April this year. This news was supposed to inspire the market as the company would now start earning extra income from the streaming unit.
However, the news did not impact the market as would be anticipated. Management weaknesses have been the company’s Achilles heel. To indicate this fundamental weakness, AT&T did not reveal its financial plan in light of the proposed transaction.
The management weaknesses reflect on AT&T’s share price. At a market valuation of $23.80, the share price is at the second-lowest level of the last year. There is also little momentum on the share’s activity. The share is on a declining trend that the investors should watch closely.
AT&T share price shows mixed signals
Source – TradingView
The moving averages, RSI and MACD analyses give mixed signals. MA 10 and MA 20 have been trending below MA 50 since September 2021. Over the same period, the MACD remained below 0.
In January this year, the MACD rose above the signal, starting a bullish trend sustained until this week when the MACD turned back down to converge with the signal at -0.77. The RSI at 38.43 slipped below the RSI SMA 14 at 40.63. Combining the three indicators points to mixed signals. Until a clear signal is obtained, the verdict on AT&T is to hold the stock.
AT&T announced the acquisition of WarnerMedia by April. While expected to excite the market, the news was watered down by persistent management weakness. We recommend that investors wait for a clear signal on the direction of the share price. The stock is a hold at the current level.