Cell Tower and Wireless Telecommunications Blog. While the underperformance is clear, I also think that Elliott Management’s analysis (carefully?) Elliott Management disclosed a $1 billion stake in Crown Castle International (ticker: CCI) earlier this week, arguing that the Houston-based cell-tower … fails to give any credence to the opportunity that fiber/small cells may provide to Crown Castle that its peers will miss if small cells take off. On July 6th, Elliott published a letter and presentation in which we demonstrated with facts and analysis that the … This copy is for your personal, non-commercial use only. Activist investor Elliott Management, the same firm that trashed AT&T’s management last year, says Crown Castle International is in need of a makeover, most notably in its fiber strategy. In short, Elliott Management believes that CCI has underperformed its peers, American Tower (AMT) and SBA Communications (SBAC). According to the letter, Elliott sees Crown Castle's responses to the issues Elliott identified in the Company's fiber business to be inadequate to the scale of the required change. For the best Barrons.com experience, please update to a modern browser. Save my name, email, and website in this browser for the next time I comment. In short, Elliott Management believes that CCI has underperformed its peers, American Tower (AMT) and SBA Communications (SBAC). NEW YORK, July 20, 2020 /PRNewswire/ -- Elliott Management Corporation ("Elliott") today released a letter calling on Crown Castle International Corp. ("Crown Castle" or … Your email address will not be published. Required fields are marked *. Crown Castle becomes the latest company to fall into the crosshairs of Elliott Management, which engaged in high profile battles with a number of major companies over strategy, including operators AT&T and Telecom Italia, and social media company Twitter. In short, Elliott Management believes that CCI has underperformed its peers, American Tower (AMT) and SBA Communications (SBAC). If near term ROI is the only metric of concern, then no company would have pursued new build towers in the nascent days of cellular nor would any company pursue a multi-tenant small cell fiber centric build. I suspect that CCI could do a better job managing the fiber business side of their fiber acquisitions. We don’t see how CCI can’t significantly increase ROI in the short term without changing the way they build fiber- which would negate the upside from future small cell deployments which require greenfield builds to see higher collocation rates, I agree though that the time horizon for ROI seems to be pushing further out than expected. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. Cramer opines on Elliott Management's activist stake in Crown Castle However this plays out, "Mad Money" host Jim Cramer thinks the brewing battle between Elliott Management and Crown … Dow Jones Industrial Average Elliott Management has been engaged in a private dialogue with the Crown Castle for over a month, according to the letter, which it said was made public to facilitate a broader discussion of the best path forward for Crown Castle. Elliott Management argues that Crown Castle invested too heavily in fiber at the expense of macro cell towers, and that it's not making enough of a return on its fiber investment. Crown Castle’s earnings will be buoyed by a deal they made with Dish Network last week to provide the new carrier with 20,000 tower sites as well as fiber backhaul services. While the underperformance is clear, I also think that Elliott Management’s analysis (carefully?) A morning briefing on what you need to know in the day ahead, including exclusive commentary from Barron's and MarketWatch writers. But some Wall Street analysts don't believe Crown Castle will do it. Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. Other than Verizon, the wireless carriers haven’t adopted small cells as fast as we might have expected. “Either Crown Castle gives … I am hopeful that Elliott’s missive causes CCI to provide more transparency on their small cell success or lack thereof. Eventually, the providers will focus on small cells. fails to give any credence to the opportunity that fiber/small cells may provide to Crown Castle that its peers will miss if small cells take off. It took two, I believe it is too early to tell on the possible success/failure of CCI’s small cell strategy. I have found CCI’s reporting to be cryptic especially how they treat collocation of small cells and in their sharing of details related to typical MLAs. On Monday, Elliott turned up the heat, calling on Crown to immediately begin an operational and strategic review of the fiber business, claiming that Crown hasn’t yet put forth a credible plan to improve its fiber business. “Crown Castle is confident that its strategy is delivering significant, measurable results and best positions the Company to create superior long-term shareholder value,” it said in an emailed statement. Activist investor Elliott Management Corporation has frequently registered its concerns about the operation of Crown Castle… I agree that CCI is better positioned in the US for 5G buildout on towers (we previously did point by point analysis on Rural/Suburban/Urban towers for big tower companies and came to similar results- also looked at # of competing towers per tower company tower and CCI was generally higher than its peers which shouldn’t matter as much anymore given the reduction of new macrocell builds). However, as the allure of the “shiny bauble” of 5G fades and its reality (positive and negative) develops, investors large and small are starting to ask more intelligent questions which will require better information from CCI than is currently provided. We've detected you are on Internet Explorer. was off 0.3%, Write to Carleton English at carleton.english@dowjones.com. I also believe there should be upside in the future especially to smaller entrants to the market who need a mobile strategy (or MVNOs that want to reduce MVNO costs). Margaret has 4 jobs listed on their profile. I am unsure from the writeup whether Elliott simply doesn’t believe lease-up will occur or they are ignoring what has to be CCI’s main justification for their strategy. The hedge fund disclosed a $1 billion stake in the Houston-based cell tower firm last month, arguing that Crown wasn’t getting proportional rewards for its hefty investment of time and money in its fiber-cable business. Elliott Management is increasing the pressure on Crown Castle International (CCI) to respond to its complaints about its investments in fiber optics, which it says lower its stock performance compared with other tower companies. View Jessica Dorris’ profile on LinkedIn, the world's largest professional community. 6 Crown Castle reviews in Seattle, WA. “Crown Castle's return on investment in fiber is well below industry benchmarks,” Elliott Management, run by Paul Singer, wrote in a letter to Crown Castle’s board. August 17, 2020 Letter to the Board. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com. “It is becoming clear that this management team does not understand what they bought (and spent $16 billion building) and does not understand how to run the business better,” they wrote. They aren’t mutually exclusive and CCI was just as privy to the 3G/4G cycle of growth in the US that is occurring internationally now. should target a 40% return on its fiber spending. Activist hedge fund Elliott Management wants Crown Castle to sell the fiber business that it spent $11 billion building. Elliott Management slickly produced attack on Crown Castle. “Taken together, these actions paint a picture of a Company that seems to know there is a problem, but refuses to acknowledge it,” Jesse Cohn, partner at Elliott, and Jason Genrich, an Elliott portfolio manager, said in a letter to Crown’s board. Dear Members of the Board: We are writing to you again on behalf of Elliott Associates, L.P. and Elliott International, L.P. (together, “Elliott” or “we”) regarding our investment in Crown Castle International Corp. (“Crown Castle” or the “Company”). For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. The hedge fund noted that, instead, Crown announced a series of “incremental steps and rear-guard actions,” including corporate-governance changes and the coming departure of its chief operations officer, which didn’t address Elliott’s core concerns. I believe that the window for the current strong growth on existing towers in the US will be strong for the next 3-4 years and then start to taper, while international will stay strong or even accelerate. S&P 500 Shares of Crown, which have risen 16% this year, were up 0.5% to $165.48 around midday Monday. Elliott’s writeup is solely focused on near term ROI. Our cell tower and cell site database has grown to encompass over 285,000 cell site locations nationwide. ($CCI). Last week, Elliott Management disclosed a $1B stake in the Houston-based communications REIT Crown Castle International Corp ((CCI) - Get Report). Elliott’s writeup ignores completely. The Elliott Management Corporation today sent a letter to the Board of Crown Castle International Corp. proposing an immediate operational and strategic review of the Company's fiber business.. Crown Castle International Corp.1220 Augusta DriveSuite 600Houston, TX 77057 Dear Members of the Board: We are writing to you again on behalf of … Activist investor Elliott Management is ratcheting up the pressure on This copy is for your personal, non-commercial use only. CCI has benefitted from being part of the less understood 5G investment opportunity window where anything 5G related is attractive. Hedge Fund and Insider Trading News: Marc Lasry, Elliott Management, Mubadala Capital, Elastic NV (ESTC), Crown Castle International Corp (CCI), and More. An error has occurred, please try again later. I agree that foreign investment in towers is preferable – we have been pointing to American Tower ($AMT) among the Big 3 as our top pick for a few years now based primarily on the diversity of their international portfolio and their focus on new-builds. was up 0.3%, while the (If the latter, then we had unrealistic expectations as well). Elliott’s analysis shows tower level economics but omits entirely any small cell economics. There seems to be a lack of clearly enunciated goals (at least to the investor community) related to small cells. View Margaret Powell’s profile on LinkedIn, the world's largest professional community. Your email address will not be published. all of the information contained herein is based on publicly available information with respect to crown castle international (the “ompany”), inluding filings made y the ompany with the se urities and ex hange ommission (“se ”) and other sour es, as well as elliott management’s analysis of … We reviewed the Elliott Management slickly produced attack on Crown Castle ($CCI). Crown said Monday it is “open to considering opportunities to create value.” The company noted recent governance changes and other measures it has taken, and said it has received support from shareholders. CNBC’s Jim Cramer said activist fund Elliott Management’s position in Crown Castle is good news for shareholders. There is very little analysis of the future of CCI fiber/ROI as it pertains to small cells in the US. While the underperformance is clear, I also think that Elliott Management’s analysis (carefully?) Whether they will rely upon CCI or self-build or otherwise will depend upon how much impact Verizon’s aggressive build plans have on subscriber retention/growth. The duo said that since announcing their stake in Crown, they have received several comments from other fiber executives and possible financial buyers who believe they can run the business efficiently. Equipment Modifications & Lease Renegotiations, Best Practices for Landowners, Government Entities & Venue Owners, Counties, Municipalities and Public Entities. A free inside look at company reviews and salaries posted anonymously by employees. We also suspect that the time horizon on maturing these “immature assets” is longer than CCI expected. Jessica has 9 jobs listed on their profile. At the time, Elliott suggested Crown Castle (ticker: CCI) should target a 40% return on its fiber spending. Unlike towers where the economic model is simple and transparent, CCI’s small cell program is an enigma. Activist investor Elliott Management is ratcheting up the pressure on Crown Castle. The more success Verizon has, the faster the other carriers will need to deploy which will be beneficial to the lease-up of CCI’s fiber holdings. We don’t know if this is because of poor execution or unrealistic expectations. It is difficult to verify or analyze and, in that regard, it makes me (and I assume investors) suspicious of CCI. One point not mentioned in the analysis but favorable to Elliott’s guidance is that CCI’s focus on small cells has likely negated some of their strength in negotiating Master Lease Agreements (MLAs) with the wireless carriers vis-à-vis their competitors who can afford to be “ornerier”. I don’t understand why CCI’s management abandoned international tower development or acquisition while focusing on fiber acquisition. Since 2004, Steel in the Air has served over 3,000 clients, reviewed over 10,000 cellular leases and tracked over 2,000 lease buyout offers. Elliott owns an economic interest worth $1 billion of Crown Castle, and it is engaged in private conversations with Crown Castle management. Activist investment firm Elliott Management is pushing for changes to Crown Castle’s fiber business strategy, which the hedge fund says is responsible for the communication infrastructure company’s underperformance. https://www.barrons.com/articles/crown-castle-stock-fiber-cable-activist-elliott-cell-tower-51597682696. Source- Elliott Management Presentation on Crown Castle While Crown Castle has established roughly 80,000 miles of fiber, AT&T and Verizon have put down a total of 1 … We also consult on cell site and cell tower valuation and brokerage. Activist investor Elliott Management is ratcheting up the pressure on Crown Castle. NEW YORK, July 20, 2020 /PRNewswire/ -- Elliott Management Corporation ("Elliott") today released a letter calling on Crown Castle International Corp. ("Crown Castle" or … Copyright ©2020 Dow Jones & Company, Inc. 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