T-Mobile stock (TMUS) is currently trending downward in today’s trading session. It’s down about 2% as of 9:40 AM ET. The stock fell on news that John Legere, the current T-Mobile CEO, will step down on April 30, 2020. Legere has led T-Mobile since September 2012. Mike Sievert, currently the company’s president and COO, will become the new CEO on May 1, 2020. Legere will, however, continue to serve as a company board member after stepping down as CEO.
According to a Reuters report on November 18, Legere tweeted, “I’m not going anywhere soon.” He added, “This is all part of a multi-year plan and until April 30, I’ll continue as CEO, focusing on a smooth transition and getting our merger with Sprint done for America.”
In a press release, T-Mobile said that Sievert “has worked closely with Legere on T-Mobile’s merger planning, integration, and regulatory approval initiatives, with the goal of creating the New T-Mobile by successfully closing the pending acquisition of Sprint.”
It’s uncertain where Legere will land next. WeWork is in search of a new CEO to lead the company and take it public. And last week, the Wall Street Journal reported that Legere was in discussions with WeWork to turn around the office-sharing startup. But, according to a MarketWatch report on November 18, Legere “was never having discussions to run WeWork.”
T-Mobile and Sprint merger deal
T-Mobile has been struggling for over a year to close its proposed $26.5 billion acquisition deal with Sprint (S). Earlier this month, the FCC conditionally approved the merger agreement between the third- and fourth-largest mobile operators in the US. Then in July, the Justice Department cleared the merger deal. The two wireless carriers agreed to sell certain wireless assets to Dish Network (DISH) for $5 billion. The proposed new T-Mobile promised to deploy a 5G service across the US.
However, the merger deal still faces a legal challenge from a group of state attorneys’ general pushing to stop the combination. The multistate lawsuit alleges that combination would hurt wireless consumers. A court trial will begin on December 9.
T-Mobile and Sprint are currently renegotiating the terms of the merger, given that the previous merger contract expired on November 1. To learn more, check out Sprint Fairly Valued at $3 per Share amid T-Mobile Merger and T-Mobile and Sprint Merger Gets Arkansas’ Support.
T-Mobile reported adjusted EPS of $1.01, which was 5.2% higher than Wall Street’s estimate of $0.96. The company had reported adjusted EPS of $0.93 in the third quarter of 2018. T-Mobile’s revenue rose 2.0% year-over-year to $11.1 billion in Q3 of 2019. But it came in marginally below analysts’ consensus estimate of $11.3 billion. In the third quarter, T-Mobile added 1.75 million net customers, which includes 754,000 postpaid phone net customers.
Comparatively, AT&T (T) added 101,000 postpaid phone net customers. Meanwhile, Sprint lost 91,000 postpaid phone net customers.
T-Mobile stock closed at $78.07 on November 15. At its November 15 closing price, the company’s market cap stood at $66.8 billion. The stock was trading about 8% below its 52-week high of $85.22. Meanwhile, it was trading about 30% above its 52-week low of $59.96.
TMUS stock has returned 22.7% year-to-date, -2.1% in the last month, and 14.7% in the trailing-12-month period. Year-to-date, Sprint and AT&T have risen 0.2% and 38.4%, respectively. Analysts’ mean price target on T-Mobile stock stands at $89.74, which implies a 14.9% gain from the last closing price of $78.07.