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Activist Investor Takes Stake in AT&T; Four Missing after Cargo Ship Capsizes; Dorian Survivors Desperation; Harris Unveils Criminal Justice Plan. Aired 9:30-10a ET
Aired September 9, 2019 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
POPPY HARLOW, CNN ANCHOR: All right, a major investment firm is taking a big stake in AT&T, of course it is the parent company of CNN and Warner Media, and demanding some big changes.
JIM SCIUTTO, CNN ANCHOR: CNN business chief correspondent Christine Romans joins us now.
Christine, explain to our viewers what's going on here and what kind of changes they're talking about.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: So this is what you call an activist investor. This is somebody who buys up shares of a company and then goes in and says I want some seats on your board and I want you to make these changes so we can all make more money. And this is a hedge fund called Elliott Management. It announced it took a $3.2 billion stake in AT&T and it's demanding some changes, spin-offs, major changes.
The fund says if AT&T can focus on its core assets, like its U.S. wireless business, the stock could almost double to $60 a share in the next two years. Elliott wants AT&T to review and divest from many of its non-core businesses. For example, potentially spinning off DirecTV and its Mexican wireless business.
The fund also questioned AT&T's $85 billion purchase of Time Warner.
In the letter to the board, Elliott called Time Warner a, quote, spectacular company, but then questioned AT&T's strategy. Here's the language. AT&T has yet to articulate a clear strategic rationale for why AT&T needs to own Time Warner. While it's too soon to tell whether AT&T can create value with Time Warner, we remain cautious on the benefits of this combination.
Now, shares of AT&T are up before the opening bell and up at the open here. Kind of big on the news because, you know, they're saying, if you make these changes, the stock could almost double. AT&T was not immediately available for comment. AT&T's media division, Warner Media, of course, is CNN's parent company.
So it looks in this long, lengthy letter like it's asking for margin improvement, maybe some management changes and reviewing some of these -- what they see as non-core strategic assets and thinking about spinning those off.
HARLOW: I was surprised when I read this, this morning. It's a huge investment. What's your read?
ROMANS: My read is that they see a lot of value in the company and they're trying to figure out what is going to be the next move on that big $85 billion merger for Time Warner, which is, of course, the parent of CNN. And they're also looking at a company that for years, under it's previous administration, had been getting rid of different kinds of assets. You know, Time Warner had under -- for getting rid of the kinds of assets and stay very focused on content creation. And now they're seeing AT&T with this sort of streamlined core property wondering, what are they going to do with it, how are they going to make more money from it.
SCIUTTO: Merger in the news once again.
SCIUTTO: Christine Romans, thanks very much.
HARLOW: Thanks so much.
SCIUTTO: Four crew member from a South Korean cargo ship are still missing a day after the vessel capsized off the coast of Georgia. Look at those pictures there. Right now the 656 foot Golden Ray is on its side off the coast of Saint Simon's Island.
HARLOW: Our reporter Natasha Chen joins us from there.
Good morning to you, Natasha.
You did speak with some of the rescued crew members. What did they say about the ordeal?
NATASHA CHEN, CNN CORRESPONDENT: Well, Poppy and Jim, they were very tired last night, of course. There was a little bit of a language barrier. They told me that they specifically are from the Philippines, though the ship is owned by a South Korean company. Now, they all had to get off of this vessel and exit through different areas. And that's what made the rescue so difficult.
But they did tell me that their captain is with them. So the captain is among those 20 people rescued. And that they don't know what happened because by the time the ship started listing, the crew was generally all already asleep in bed. So they don't know what started the whole incident for the ship to turn over.
Right now, within the last 30 minutes, we did see a helicopter come, land on top of the cargo ship, to drop off a salvage crew, along with equipment. And what that crew is doing right now is assessing the stability of the ship because the rescue efforts on board have so far been halted. Yesterday there was a fire. They don't know what they would be dealing with inside. There are a bunch of cars that this cargo ship usually transports. There's no power in there. There are water tight doors and many compartments. So that crew is trying to figure out whether it's best to go into the vessel top down or if the Coast Guard needs to drill a hole through the side.
So that's what they're looking at right now. And that's why this effort on board has been halted. But the Coast Guard emphasizes to me they're not even 100 percent sure where these crew members are, if they're on the ship. They did search the waters extensively. So, obviously, the effort is focused on the vessel right now. Poppy and Jim.
HARLOW: Of course. Let's hope they're OK, of course. That is just such a startling image to see. Wow.
Natasha, thank you for that reporting. Please update us on those crew members when you get it.
CHEN: Thank you.
HARLOW: So nearly a week after Hurricane Dorian just slammed the Bahamas, some parts of the islands are completely cut off. Our crews have seen total devastation. We'll take you there live again this morning, next.
HARLOW: Part of the Bahamas on the brink of a humanitarian disaster in the wake of Hurricane Dorian. We know from the government numbers, 45 people are confirmed dead, but that number is expected to soar. Hundreds of people just still trying to evacuate, and even that is proving incredibly difficult.
SCIUTTO: In a video posted on Twitter just last night, you can hear people being told they must get off a ferry if they do not have a U.S. visa.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: So, please, all passengers that don't have U.S. visa, please proceed to disembark.
(END VIDEO CLIP)
SCIUTTO: Keep in mind, those are people fleeing for their lives in the Bahamas.
SCIUTTO: This morning, the U.S. Customs and Border Protection is responding to that video saying that ferry operator was at fault for not properly coordinating evacuation efforts. (BEGIN VIDEO CLIP)
MICHAEL SILVA, U.S. CUSTOMS AND BORDER PROTECTION: We asked Valeria (ph) to coordinate with the Bahamian government in Nassau and coordinate there with the American embassy, USAID and the Bahamian government.
We're there to facilitate and accommodate that process in an orderly fashion according to regulation and protocol. However, Valeria (ph) did not do that.
(END VIDEO CLIP)
SCIUTTO: We should note, visas are not required for Bahamian residents flying to the U.S. if they meet other criteria, such as having a passport and no criminal record.
Requirements for ferry transportation to the U.S. are unclear.
Our Patrick Oppmann, he is in Freeport, Bahama, this morning.
Patrick, first of all, respect to you, been there since the beginning under what we can only imagine are harrowing conditions. You're bringing back such an earthy sense of what's happened there through this tragedy. Tell us where we are several days now after the storm came through.
PATRICK OPPMANN, CNN CORRESPONDENT: Thank you so much.
Well, you know, here in Freeport, we're still without water or power. That's why I'm having (ph) the Hemingway look here.
But life is slowly returning to normal. You can get a hot meal on occasion if you wait in line. You can get water, drinking water, and gasoline if you wait for a couple hours. But if you go outside of this city, it feels like the hurricane just hit, although it's now a week later.
And there were towns in the eastern most point, which were the first hit. They had the eye of the hurricane directly over them. We wanted to go there because we hadn't heard anything. These towns have been cut off now for days. And the only way we could do that, we tried driving, was to get in a boat.
When we got there, after about two hours on this boat, the boat captain said the channel that usually gets you into this town, McLeans Town, the eastern most town on the island, the channel was completely filled in. And then we had this really eerie sensation as we were taking our boat over submerged cars. We couldn't see if anybody was inside of those cars, but there was perhaps a dozen cars under water in the harbor.
Then we got on the dock of this town. There was a dog there to greet us. Not many other people. And the silence of this ghost town was just eerie. There was debris about six feet high. In places you could smell there was something rotting underneath. The few residents that we talked to, they had all lost family members to the storm.
(BEGIN VIDEO CLIP)
EVA THOMAS, FAMILY MEMBERS DIED IN STORM: I think about it because I had a nephew, and three of his kids die in storm. I -- my heart is broken. I say I can't imagine the terror that they were faced with before they passed.
UNIDENTIFIED MALE: She was swollen, like, you know, when a dog get hit and swells up and is ready to burst, ready to burst? That's how she was. Swollen.
(END VIDEO CLIP)
OPPMANN: And, you know, it's just shocking to, you know, hear people talk about their family members. I know it's going to upset some viewers, that kind of language, but, you know, it's up to relatives to go find their family members, their bodies. And they've been out in the sun for days. And it's just insult to injury, the hurricane took away so much and now the lack of response here has really stripped people of the remaining dignity they had. And so many people want to leave. It is a humanitarian crisis and we are only 80 miles off the U.S. coast.
SCIUTTO: You know, where is the cavalry, right? You wonder.
SCIUTTO: So close that -- there's no lack of information about the need on the ground there.
Patrick, you're performing an important service getting the word out here. Thanks very much.
HARLOW: Thank you.
SCIUTTO: Senator Kamala Harris looking to pick up steam ahead of Thursday's Democratic debate. She has unveiled her plan to fix the criminal justice system. Will it silence critics within her own party attacking her record as a prosecutor?
SCIUTTO: Looking to gain momentum ahead of this week's Democratic debate. This morning, Senator Kamala Harris released her plan to overhaul the criminal justice system. Among other things, it calls for a shift away from mass incarceration.
HARLOW: Of course her career as a state attorney general and prosecutor has drawn criticism from some on this front. She's going to be asked about it no doubt on the debate stage this week. Her campaign is hoping this proposal will better inform voters about her record. Abby Philips joins us with more details.
I mean I think you could argue, Abby, that this has been, and may continue to be, her Achilles heel, and how well she can explain her record on this front.
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Poppy, some people definitely think this could be a potential liability. But the Harris campaign wants this to be her main strength. And as part of that effort, they're trying to roll out a more forward-looking plan to address some of the concerns and criticism that she's faced and also to make it clear to Democratic activists that she intends on reforming the system.
Now, some of these reforms that she's talking about, a lot of other candidate have proposed as well, but she's talking about ending mass incarceration, shifting away from that system, ending federal mandatory minimums, ending the death penalty, among other things. She talks about legalizing marijuana, reforming the bail system. And these are all -- these are all reforms that I think a lot of activists have been hoping that she would weigh in on.
Now, this has become a big issue because, as I mentioned, the Harris campaign is actually trying to make her career as a prosecutor a central part of her argument about how she can beat Donald Trump. She said she is the best person to prosecute the case against four more years of Donald Trump. But at the same time, she's faced criticism, notably at the last presidential debate when Tulsi Gabbard raised some of these issues.
Now, Harris really denies that she was an overly aggressive or tough prosecutor, but at the same time, sources tell CNN, she feels -- her aides feel like she could have been better prepared for that. And she told "The New York Times," in an interview this weekend, that some of this criticism, particularly coming from African-American activists, has been emotionally hurtful.
Jim and Poppy.
SCIUTTO: Abby Phillip in Washington, thanks very much.
Coming up, we will have more on my exclusive reporting this morning about a secret U.S. intelligence operation to rescue a high level covert source from inside the Russian government. Stay with CNN.