People walk past an AT&T store in New York.
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AT&T withdrew its plans to purchase $4 billion in stock buybacks in order to remain flexible during the coronavirus pandemic, according to a regulatory filing.
The company announced on March 3 an accelerated share repurchase agreement (ASR agreement) with Morgan Stanley to repurchase $4 billion worth of common stock in its fiscal second quarter. Shares of AT&T closed Thursday at $31.15 per share.
“While our business continues to operate effectively during the COVID-19 global pandemic, we have decided at this time to cancel this ASR agreement and any other repurchases to maintain flexibility and focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including nationwide 5G,” AT&T said in the March 19 filing. “These continued investments will help ensure the Company is well positioned when the pandemic passes and economies begin to recover.”
AT&T added that it’s unable to estimate the impact from COVID-19 on the company’s financial or operational results.
Several companies have shut down or limited operations in an effort to slow the virus and have warned of the financial impact. In an effort to combat the negative effects COVID-19 will have on the U.S. economy, the Trump administration is working on a stimulus package that’s expected to top $1 trillion in spending.
AT&T’s announcement comes after progressive lawmakers, including Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y, have proposed putting conditions on federal bailouts and stock buybacks. President Donald Trump on Thursday also said that he would not oppose forbidding companies that receive federal assistance during the coronavirus pandemic from conducting stock buybacks.
Additionally, billionaire entrepreneur Mark Cuban told CNBC on Wednesday that companies should be prevented from buying back stock ever again if they get government assistance due to the coronavirus pandemic.
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