Verizon, AT&T and T-Mobile Tumble 10% to 13% on SpaceX Spectrum Deal

Shares of the three big U.S. wireless carriers tumbled on Friday, Oct. 9, after SpaceX agreed to buy a nationwide block of low-band spectrum for its Starlink Mobile service. T-Mobile US fell 13.3%, AT&T dropped 10.8% and Verizon lost 10.1%, according to Yahoo Finance data.

Early in the session, all three were the biggest percentage decliners in the S&P 500, Reuters reported. T-Mobile hit its lowest level in more than 33 months, according to Reuters.

How much did telecom stocks fall?

Company	Oct. 9 close	Change from Oct. 8 close
T-Mobile US (TMUS)	$148.58	−$22.73 (−13.3%)
AT&T (T)	$22.18	−$2.69 (−10.8%)
Verizon (VZ)	$41.65	−$4.70 (−10.1%)
Crown Castle (CCI)	$79.64	+$10.75 (+15.6%)
American Tower (AMT)	$182.24	+$15.51 (+9.3%)
SBA Communications (SBAC)	$182.49	+$12.48 (+7.3%)

Source: Yahoo Finance data.

Part of Verizon's drop reflects its dividend. Oct. 9 was the record date for Verizon's quarterly dividend of 70.75 cents a share, payable Nov. 2, the company said. Friday was also the stock's ex-dividend date, Tradingpedia reported, so buyers on Friday did not get that payout.

SpaceX's own shares closed up 1.2% at $162.57, according to Yahoo Finance data. European telecom stocks also fell. Deutsche Telekom dropped 7.1% in early trading, Reuters reported.

What did SpaceX agree to buy?

SpaceX signed a definitive agreement on Thursday, Oct. 8, to acquire 100% of Grain Management's nationwide 800 MHz holdings, which include up to 14 MHz of paired spectrum, according to SpaceX as reported by Telecompetitor. The deal requires Federal Communications Commission approval and other customary closing conditions.

The companies did not disclose financial terms. The Wall Street Journal, citing sources, valued the deal at about $8 billion, Reuters reported. Grain bought the spectrum from T-Mobile in August for cash and its own 600 MHz licenses, Telecompetitor said.

SpaceX said the spectrum "closes one of the key remaining technical gaps" between Starlink Mobile and becoming a major U.S. mobile carrier, according to Telecompetitor. Low-band signals travel farther and reach deeper indoors than the 2 GHz mid-band spectrum Starlink Mobile has relied on, BeInCrypto reported on Yahoo Finance.

"Spectrum is a finite resource with an expanding role in the economy," Grain Management founder and Chief Executive David Grain said, according to Telecompetitor.

Why are carrier stocks falling on a SpaceX deal?

Analysts see SpaceX gaining leverage against the carriers. Evercore ISI analyst Kutgun Maral said, "This strategic shift places SpaceX in a stronger negotiating position," according to Reuters. Morgan Stanley called the deal "incrementally constructive" for tower operators, Reuters said.

The selloff came on an otherwise firm day for stocks: the Dow Jones Industrial Average rose 0.83% to 51,654.95, according to Yahoo Finance data. For more on SpaceX, see SpaceX Seeks $40 Billion in Debt to Buy Nvidia Chips. More company news is in our companies section, and the wider tape is in markets.