Technology

SoftBank shareholders rejoice: T-Mobile stock package triggers a fireworks display in the stock market.

As part of the merger between Sprint and T-Mobile, common stocks were issued, resulting in a significant increase in the stock values of the merged company.

Eulerpool News Dec 30, 2023, 9:00 AM

The transaction is the result of a merger that is considered groundbreaking for the US market. SoftBank has instructed T-Mobile US to issue 48.75 million common shares after the conditions of the merger agreement have been met. This represents a gain in SoftBank's portfolio and strengthens T-Mobile US's financial position. SoftBank's stock soared five percent after the announcement of the transaction, marking one of the biggest gains in over a month.

While the US benchmark Nikkei has risen by nearly 30 percent, SoftBank stocks have only recorded a 14 percent increase this year.

According to Paul Golding, an analyst at Macquarie, the company is currently trading at a discount of around 45.5 percent to its asset value. The merger represents a strategically wise decision to increase the proportion of publicly traded, measurable equity in SoftBank's balance sheet and thus also increase the proportion of marginable equity relative to debt.

This not only strengthens the financial stability of the corporation but also demonstrates SoftBank's trust in the future development of T-Mobile US.

With the merger of Sprint and T-Mobile, synergy effects are also expected, which will have a positive impact on the financial figures of T-Mobile US.

The German Telekom remains an important player in the US telecommunications market as the majority owner of the merged company. The merger is also a sign that SoftBank is focusing on strengthening and expanding their telecommunications business to enable future growth.

Overall, the merger of Sprint and T-Mobile demonstrates that SoftBank continues to make strategic decisions to keep the company on a growth trajectory while strengthening financial stability. SoftBank's stock prices have significantly improved after the announcement, confirming the importance and success of this transaction.

Professional-grade financial intelligence

20M+ securities. Real-time data. Institutional insights.

Trusted by professionals at Goldman Sachs, BlackRock, and JPMorgan

News