US, European telecom stocks slide as SpaceX spectrum deal rattles sector
TMUS•US and European telecom stocks fell after SpaceX agreed to acquire an 800 MHz spectrum portfolio from Grain Management in a deal valued at about $8 billion. T-Mobile, Verizon and AT&T fell 5.5% to 7.4% in premarket trading, while tower operators rose.
1. Telecom shares fall
T-Mobile, Verizon and AT&T fell between 5.5% and 7.4% in premarket trading. The STOXX Europe 600 Telecommunications index dropped more than 2% to its lowest level since January 30; Deutsche Telekom fell 6.5%, Vodafone 4.1%, Orange 2.3% and Telefonica 3.9%.
2. Spectrum deal details
SpaceX agreed to acquire Grain Management’s nationwide 800 MHz spectrum portfolio, bolstering its ambitions in satellite-to-cellular connectivity. The companies did not disclose financial terms; a report valued the deal at about $8 billion. SpaceX shares rose 4% after announcing the acquisition, which remains subject to regulatory approval.
3. Tower operators rise
American Tower, Crown Castle and SBA Communications advanced between 6.7% and 8.3%, bucking the selloff. Morgan Stanley analysts said the transaction was “incrementally constructive” for tower operators, and that any threat to established carriers is likely to materialize gradually, starting in rural markets.
