Shares of Crown Castle (NYSE:CCI) saw an increase of over 4% intra-day today following the announcement by Elliott Investment Management of its more than $2 billion investment in the wireless tower company and its intention to push for changes.
Elliott plans to engage with Crown Castle to implement strategies aimed at enhancing the company’s stock performance. In a communication to Crown Castle’s Board, Elliott criticized the management for neglecting data-driven analysis and failing to make recommended changes. This oversight, according to Elliott, has resulted in Crown Castle’s consistent underperformance compared to its peers and the S&P 500 index over the past 15 years, including one-, three-, and five-year periods. Furthermore, the company’s stock price recently hit a six-year low.
Elliott blames the Board for a significant lack of oversight, leading to poor management and flawed financial policies. They assert that the company’s strategy under CEO Jay Brown, who has been in charge since 2016, has been unsuccessful, as evidenced by the significant gap in performance compared to its direct competitors. According to Elliott, this underperformance has led to nearly $26 billion in unrealized shareholder value.
In response to these concerns, Elliott is calling for several changes, including the appointment of new executive and board leadership, a thorough review of the fiber business, an optimized incentive plan, and enhanced corporate governance.