Key Drivers of Recent Stock Price
T-Mobile’s stock price has generally been increasing over the last two years, and this can be attributed to several factors which will be discussed below. Currently, the price is expected to increase over the end of 2019 up to 2020. Overall, the stock has gained over 21% this year.
5G and Acquisition of Sprint
T-Mobile’s acquisition of Sprint will make it the first provider of smartphones that are compatible with 5G. The 5G launch will be done in December 2019, and the acquisition of Sprint is almost over. It is expected the interest that investors have in T-Mobile will increase as it has already started to gain momentum. These factors will drive the T-Mobile stock price to more than the $93 low-end price target (Does T-Mobile…, 2019). The T-Mobile resources and market share have become and will continue to be considerable. Immediately after the finalization of the deal, T-Mobile’s shares may fall in the short term, which may be a favorable time to buy the stock. However, the fall in shares won’t last for long, and after the merger, T-Mobile’s shares will be very attractive (T-Mobile–Sprint Merger, 2019).
Acquisition of Layer3 TV
Immediately after the announcement of T-Mobile’s intent to acquire Layer3 TV as its streaming platform in December 2017, the company’s shares in the US increased by 0.55% to $63.83 (Zacks, & Zacks Equity Research, 2017). After it finally acquired the TV service, its stock experienced what has been termed as a considerable increase in price and many people purchased it because it promised to have high returns (T-Mobile, 2018). Don't use plagiarised sources.Get your custom essay just from $11/page
Iowa Wireless Services
T-Mobile also acquired Iowa Wireless in January 2018. Iowa Wireless was a mobile operator which served customers specifically in Iowa, Illinois, and Nebraska. The deal helped T-Mobile increase its geographical reach and enabled it to acquire the customers that were using iWireless before. After the purchase, the price of the stock also experienced a slight increase because the provider was now seen as more favorable for investment.
Recommendations
T-Mobile has benefitted a lot from the acquisitions that it has done, and this has made it become a strong company which is worth investing in. Even though its merger with Sprint will only be finalized in the first half of next year, this has already started influencing its stock price positively as the merger will make the provision of 5G smartphones possible and more effective. T-Mobile should be purchased because it has a strong future ahead of it and based on its past performance, it has managed to stay on its toes and leveraged the most desirable companies for purchase and hence, increased the value of its stock and the corresponding value of the company as a whole. Currently, the company is going to be the first provider to issue 5G smartphones, and this sets it apart from all its competitors. It is expected that due to this added feature, its subscriber base will increase and more people will rely on the company’s services. The company is already one of the three leading mobile service providers in the country, and it is increasing its competitive advantage by providing a feature which will be unique to it. Even though it is not possible to correctly speculate what will happen to the company, most of the evidence reveals that it is going to be successful in the future. It is, therefore, worth purchasing.
References
Does T-Mobile Stock Have Any Upside Potential? (2019, October 30). Retrieved from https://articles2.marketrealist.com/2019/10/does-t-mobile-stock-have-any-upside-potential/
T-Mobile–Sprint Merger: Time to Buy the Stocks? (2019, October 15). Retrieved from https://articles2.marketrealist.com/2019/10/t-mobile-sprint-merger-time-to-buy/.
Zacks & Zacks Equity Research. (2017, December). T-Mobile US to Launch OTT Service in 2018, Buy Layer3 TV. Retrieved from https://www.nasdaq.com/articles/t-mobile-us-launch-ott-service-2018-buy-layer3-tv-2017-12-14.
T-Mobile. (2018, April 11). Mobile Closes Layer3 TV Acquisition, Prepares to Take on Cable & Satellite TV. Retrieved November 2019, from https://www.t-mobile.com/news/uncarrier-tv-close.