One of the use cases we see at InfoDNA from clients that need more attention is the act of ‘due-diligence document forensics’. Before an acquisition to content mine documents and identify macro language issues that could cause the purchase price to be lowered to make up for potential revenue or toxic language. The latest example of an acquisition that should be very different is the ATT acquisition of DirecTV for $49 billion in 2015. Our previous discussion outlined the deteriorating position ATT is in from a lost revenue and balance write-off perspective.
In just a few short months the story is worse in how ATT cannot find a bidder for the distressed asset for a price of $15 billion.
Millions of customer flee
AT&T has lost nearly 8 million customers since early 2017 from its Premium TV services, which includes DirecTV satellite, U-verse wireline video, and the newer AT&T TV online service. Total customers in that category decreased from over 25 million in early 2017 to 17.1 million at the end of September 2020.
AT&T has driven many of those customers away by repeatedly raising prices and reducing availability of promotional deals and has already announced another round of DirecTV and U-verse TV price increases for January.
If the only knew how ‘sticky’ customers were based on their contracts, this would be a very different story. But they didn’t even look!! But with ATT’s balance sheet sitting with over $153B in debt, they have to do something to maintain liquidity and market leadership in their primary businesses.
Read more about InfoDNA Solution and what should happen before any acquisition to understand the real value of assets – both tangible and intangible HERE.