US, European telecom stocks slide as SpaceX spectrum deal rattles sector
XLC•US and European telecom stocks fell after SpaceX announced an acquisition of Grain Management’s nationwide 800 MHz spectrum portfolio; major US carriers dropped 5% to 6% in premarket trading. The deal was reportedly valued at about $8 billion.
1. Telecom shares fall
US and European telecom stocks tumbled on Friday after SpaceX’s announced acquisition of Grain Management’s nationwide 800 MHz spectrum portfolio heightened concerns about competition from satellite-based mobile services. T-Mobile US, Verizon and AT&T fell between 5% and 6% in premarket trading, while the STOXX Europe 600 Telecommunications index dropped 3.3% to its lowest level since February.
2. Spectrum deal details
Deutsche Telekom fell 8%, Vodafone dropped 4.5%, Orange lost 3.4% and Telefonica slipped 3.3%. The companies did not share financial terms; the deal was reportedly worth about $8 billion. Morgan Stanley analysts said the transaction was a clear sign SpaceX would be a more aggressive spectrum acquirer, with any threat to established carriers likely to materialize gradually, starting in rural markets.
3. Tower stocks advance
American Tower, Crown Castle and SBA Communications rose between 5% and 6%, bucking the sector-wide selloff. Morgan Stanley called the transaction incrementally constructive for tower operators, saying even a satellite-centric network could require towers, rooftops and small cells.
