TD Cowen analysts responded to this news by telling clients, “While not a game changer, we view this as a modest win for T-Mobile.” Michael Alcamo, president of New York-based investment bank M.C. Alcamo & Co added, “Except for just a few channels in key markets, and the state of Maine, T-Mobile now has the contiguous nationwide [spectrum] inventory it needs to light up fully nationwide 5G.”
T-Mobile CEO Mike Sievert said in September that the nation’s second-largest wireless provider had already put up some of the radios for the new spectrum. “And when we get those licenses, we can turn all that spectrum on affecting 50 million people within two days,” Sievert noted. That’s 31 million shy of the total covered by the new spectrum which means that the carrier will need to cut some checks made payable to Nokia and Ericsson who are T-Mobile’s largest 5G radio suppliers.
The 7,156 licenses were won by T-Mobile during FCC Auction 108 which consisted of 2.5GHz spectrum. The FCC had to wait for new legislation allowing it to regain its congressional auction authority before it turned the licenses covering the spectrum over to T-Mobile.
The other thing that had T-Mobile executives excitedly celebrating the holidays was the transfer of 49 million T-Mobile shares to SoftBank. The value of those shares was $7.6 billion. The stock’s weighted volume average above $150 per share for 45 days triggered the transfer which was written into the 2020 deal between T-Mobile and SoftBank related to the former’s acquisition of Sprint.
According to investment bank Raymond James, “The potential share issuance had been an overhang on the stock and created an artificial ceiling for a while, and we believe some investors had been automatically and systematically shorting the stock as it had approached the ~$150 trading level at various times. We feel this artificial ceiling for the stock had frustrated many investors, though it also allowed the company to repurchase stock at lower prices.”
Sure enough, over the last month, T-Mobile’s shares have risen 5.96% and have cleared that $150 area where the pros had been selling the stock. T-Mobile’s shares closed today at $161.91, up $1.58 or .99%.