Olympic Peak’s Todd Westhus says AT&T bonds are overvalued.
AT&T “has a ton of debt,” he said Wednesday on CNBC’s “Squawk Box.” “This is a very mature business. Revenues have been declining.”
He recommends shorting the company’s bonds.
Shorting is a trading strategy that involves selling a borrowed asset with a view that it will drop in value and the asset can be bought back later at a lower price.
In his presentation for the Sohn Tel Aviv conference Wednesday, Westhus said AT&T added $125 billion in additional debt to its balance sheet since 2007. He noted that the wireless business is facing more competition and has deteriorating growth trends.
Westhus is the founding partner and chief investment officer of Olympic Peak. Prior to this role, he was managing partner at Perry Capital, where he worked for 11 years.
Sohn is series of widely anticipated hedge fund conferences, where managers volunteer their time and best investment ideas to raise money in the fight against childhood cancer.
AT&T did not immediately respond to a request for comment.
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