What happened

Shares of AT&T (T -0.12%) have dropped today, down by 6% as of 11:30 a.m. EDT, after the company said it would cancel a previously announced stock buyback plan due to uncertainties around the COVID-19 pandemic. The telecommunications and media giant also said it wasn't sure just how bad the outbreak's financial impacts would be.

So what

AT&T had announced earlier this month that it had entered into an accelerated share repurchase (ASR) agreement to repurchase $4 billion in stock. Ma Bell has now nixed that plan.

AT&T headquarters

Image source: AT&T.

"While our business continues to operate effectively during the COVID-19 global pandemic, we have decided at this time to cancel this ASR agreement and any other repurchases to maintain flexibility and focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including nationwide 5G," the company wrote in a regulatory filing. "These continued investments will help ensure the Company is well positioned when the pandemic passes and economies begin to recover."

Now what

The buybacks were part of AT&T's broader effort to appease activist investor Elliott Management, which took a multibillion-dollar stake in the company late last year and began to agitate for changes. While some companies have suspended dividends, AT&T did not mention any changes to its dividend payout. The company may also be seeking $3 billion in loans to help weather the crisis, according to Bloomberg.

"The impacts of the pandemic could be material, but due to the evolving nature of this situation, we are not able at this time to estimate the impact on our financial or operational results," AT&T warned.