uploads/2020/02/AdobeStock_269760566.jpeg

Big Day for the T-Mobile and Sprint Merger Deal

By

Updated

On Monday, there was a big update for the proposed $26.5 billion T-Mobile (NYSE:TMUS) and Sprint (NYSE:S) merger deal. T-Mobile and Sprint stocks gained 8.2% and 68.5%, respectively, after-hours. The telecom stocks rose after the Wall Street Journal and The New York Times reported that U.S. District Judge Victor Marrero will likely approve the merger deal. The decision will be made public today. Meanwhile, AT&T (NYSE:T) gained more than 1% after-hours on the same day.

T-Mobile lost close to 1.1% during normal trading on Monday, while Sprint and AT&T lost 2.6% and 0.3%, respectively.

Article continues below advertisement

T-Mobile and Sprint merger deal

The third and fourth-largest wireless players in the US are waiting for a ruling from a district judge on whether they can move forward with the merger deal. According to a CNBC report, “T-Mobile, Sprint and Dish Network, which is awaiting approval to start a new national wireless network, all haven’t seen the judge’s ruling.” The report also said, “The details and potential conditions of the transaction are essential to ensuring the deal still makes sense to all parties.”

Last year, the merger deal was blocked by more than a dozen state attorneys general due to antitrust concerns. The states argued that the tie-up would be anti-competitive and lead to higher wireless prices for consumers. However, the two wireless carriers argued the exact opposite. They stated that the new T-Mobile would increase competition, reduce prices, create jobs and innovation, and rapidly deploy a 5G network across the US.

Article continues below advertisement

Regulators approved the merger deal

The Department of Justice and the FCC conditionally approved the merger deal last year. The combined company agreed to create competition by selling certain wireless assets to Dish Network (NASDAQ:DISH). Dish will likely replace Sprint by deploying its own 5G wireless network. However, antitrust regulators think that Dish lacks the experience to be a viable competitor.

Stock returns

In the last 12 months, T-Mobile and Sprint stocks returned 23.6% and -18.6%, respectively. Meanwhile, the S&P 500 Index rose 23.7% in the last 12 months.

T-Mobile stock fell 1.1% and closed trading at $84.53 on Monday. The stock traded 1.5% below its 52-week high of $85.79 and 24.0% above its 52-week low of $68.16. Based on T-Mobile’s closing price on Monday, the stock was trading 3.7% above its 20-day moving average of $81.48. T-Mobile is trading 7.0% above its 50-day moving average of $79.03 and 6.5% above its 100-day moving average of $79.34.

Sprint stock also fell 2.6% and closed trading at $4.80 on Monday. The stock was trading 1.3% above its 20-day moving average of $4.74. Sprint is trading 5.7% below its 50-day moving average of $5.09 and 14.7% below its 100-day moving average of $5.63.

Read Will Judge Reject T-Mobile and Sprint Merger Plan? and Should Investors Buy or Sell T-Mobile Stock? to learn more. Also, read T-Mobile and Sprint Merger Looks Less Likely.

Advertisement

More From Market Realist