Crown Castle’s fiber and small cell business under fire – again

Elliott Investment Management, an activist investor firm, is taking aim at Crown Castle again, arguing the company needs to overhaul its management and potentially put its fiber business up for sale.

Importantly, Elliott said it now owns roughly $2 billion in Crown Castle stock. That’s double what the company owned in 2020 when it embarked on a similar campaign against Crown Castle. Although Elliott managed to enact some changes at Crown Castle during its first campaign roughly three years ago, Crown Castle’s CEO Jay Brown is still at the company’s helm, and his small cell and fiber strategy remains mostly intact.

“Crown Castle suffers from a profound lack of oversight by the board, which has contributed to its irresponsible stewardship and flawed financial policy,” Elliott wrote in a letter Monday announcing its new campaign against Crown Castle. “The company’s strategy, led by CEO Jay Brown since 2016, has been a failure, as demonstrated by the breathtaking magnitude of its underperformance. … During the tenure of the current executive team, Crown Castle has underperformed its direct peers by an average of 85% in total return, which translates into nearly $26 billion of unfulfilled shareholder value.”

Crown Castle hasn’t yet made any public response to Elliott’s latest effort. According to The Wall Street Journal, Elliott recently pursued similar campaigns against companies including Salesforce, NRG Energy and Goodyear Tire & Rubber.

A game of M&A

Crown Castle is one of the three big cell tower owners in the US, along with SBA Communications and American Tower. But while SBA and American Tower have pursued other lines of business – including data center acquisitions and international expansions – Crown Castle has focused on building fiber and small cell operations in the US market.

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