T-Mobile and Sprint merger update
On March 7, the FCC (U.S. Federal Communications Commission) stated that it “paused its 180-day informal time clock” on the review of the $26 billion proposed merger between T-Mobile (TMUS) and Sprint (S), according to an FCC document. In addition, the FCC stated that the decision was made after the third and fourth-largest US mobile operators filed “significant additional information regarding their network integration plans for 2019-2021” and other additional information on the merger, which allows for more public input. The review period would resume on April 4 at day 122.
However, US antitrust regulators have expressed concerns about the merger reducing the competition in the US telecommunications space. Other than the merged company, the industry would only include Verizon (VZ) and AT&T (T) as the other major mobile operators. Concerns also included rising prices from wireless service providers and possible job losses after the merger.
Postpaid phone net additions
Sprint and T-Mobile have defended the merger. They highlighted that the entry of top cable companies like Charter Communications and Comcast into the mobile space shows that there will still be plenty of competition in the wireless market. The companies also argued that the proposed merger could enhance their 5G network scale, boost cost synergies, and improve their competitive position against Verizon and AT&T.
T-Mobile and Sprint both want to get closer to Verizon and AT&T—the market leaders. In the quarter which ended on December 31, T-Mobile added 1 million postpaid phone net customers. Verizon and AT&T added 653,000 and 134,000 postpaid phone net customers, respectively. Sprint lost 26,000 postpaid phone net customers during the same period.
On March 15, Sprint’s (S) closing price was $6.39 per share. Based on the closing price, Sprint has a market capitalization of $26.1 billion.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.