T-Mobile Is Giving Customers Stock In the Company (cnn.com) 78
T-Mobile is going to great lengths to lure customers. On Monday, the United States' third-largest wireless carrier announced that it will give one share of T-Mobile stock to millions of customers. These customers, the company added, will get a chance to earn more stocks if they are able to refer friends and make them switch over. CNN reports: The company isn't issuing new stock, so the program won't dilute existing shareholder value. T-Mobile will buy shares from the open market and give them to customers. T-Mobile estimated about 1 million shares in its SEC filing, but Legere says he wants "millions and millions" of customers to participate. "I'm gonna thank you like you've never been thanked before," Legere said during an event in New York. The new "Stock Up" promotion is part of T-Mobile's Un-carrier marketing strategy, which strives to give customers more flexibility on data usage. In the past, the company has offered promotions for video and music streaming, roll-over data plans and international roaming.
Awesome! (Score:2)
I already have free texting and data when I travel to Canada (quick easy when living in Seattle), and now I get stock options too? SWEET!
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Stock, not options.
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Please do not share with my employer that I get free texting and data when I travel to Canada next month. I told them I could not communicate with them while I was in the Great White North.
Thx!
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Please do not share with my employer that I get free texting and data when I travel to Canada next month. I told them I could not communicate with them while I was in the Great White North.
Thx!
Are you expensing those mobile bills? If so, then you have no recourse - it's not like /. is any more authoritative or visible than, say, t-mobile.com.
If it's a personal phone, just don't tell them your carrier...
Nice (Score:3, Interesting)
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I wonder why investors are behaving strangely.
P/E at 29.34. I wouldn't touch that stock with a ten-foot pole. I prefer dividend-paying stocks with P/E at 20 or less.
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Except you don't buy it, you receive it. Just sell it ASAP if you feel it's going to drop.
Except investors don't get free shares. Re-read the thread that I commented to. Investors, not customers.
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A long time ago . . . the Deutsche Telekom . . . the parent of T-Mobile, was privatized. The "Talking Heads" on television pitched this as the greatest opportunity as a stock for the "common people". Inexperienced investors lapped it up and bragged about how much they had "earned" by investing in that stock.
About a year later, the stock had tanked to less than half of offering value.
If you inquired to those braggarts, on how their "super investment" in Deutsch Telekom was doing . . . smoke would come ou
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You are 99% incorrect, as page S-5 of the Prospectus says "Shares for the Plan will be purchased in the open market and will be held at the Depository Trust & Clearing
Corporation (the “DTC”)."
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To be fair, that happened during the dotcom bubble.
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I'm with you on dividends and low P/E (though I prefer under 12). It is worth noting however that if you are given the share for free, then P = 0, therefore P/E = 0. And not one of those pseudo-0's that some charts show when E < 0.
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Normally, a share buy-back causes prices to inch up... I wonder why investors are behaving strangely.
Because normally a company retains shares that it buys back, exchanging cash for stock, with no net loss of value. But in this case they are burning cash to buy the shares, and then giving away the shares. That is a loss of value, so it makes sense for the stock price to go down, unless investors thinks the PR value of this stunt exceeds the cost, which they apparently don't.
Disclaimer: I am a T-Mobile customer, but I don't think my loyalty will be affected by this. I only use them because they offer a
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I use them for
* better customer service
* one of the first non-prepaid carriers to do away with contracts
* has a better track record with unlocked phones
* signal is better and faster in my area of San Antonio (though less than when I was with Sprint when I leave San Antonio)
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There are more than 822M outstanding shares of T-Mobile stock. They are giving away approx 11M. That is not going to change the operation of the company in the slightest.
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As of right now, the stock is down 1.28% for the day. Normally, a share buy-back causes prices to inch up... I wonder why investors are behaving strangely.
They are spending the cash like a buy-back, but not reducing the number of outstanding shares. So they may be reducing, if not diluting, existing shareholder value.
Re: Nice (Score:2)
Paying ~$42 for each new customer that probably pays $35-$70 a month isn't diluting shareholder value the way I do accounting.
Also look at how this move actual makes T-Mobiles position stronger.
So big takeover company TBC is out there. TBC wants to buy/merge with T-Mobile to grow. TBC goes to T-Mobile to strike a deal and learns a bunch of their best customers are also share holders. How do you think the new company is going to look? AreTBC guys in suits going to be running it or is the dude with the lo
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Re: Nice (Score:1)
Only one share... (Score:3, Funny)
Re:Only one share... (Score:4, Insightful)
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It's Sprint that sucks.
Must be the T-Mobile store next to my friend's Sprint Store. He always helping T-Mobile customers coming over to switch to Sprint.
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I left Sprint because of their shitty customer service and landed at T-Mobile, which has had excellent customer service. So there's another data point for you.
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To be very specific, I had a family plan with fixed minutes per phone. I would periodically check the minutes left on each phone via the website. One day, it started pooling all of the minutes. Obviously, this was not going to work so I called customer service. The guy claimed that he'd worked there for 6 months and the website had always behaved like that. I was like, listen guy, I've been checking this site 3 or 4 times a week for years and it just changed. He simply said, "I don't know what to tell you..
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Ha! Well, he's very fortunate to not be a paycheck-to-paycheck shmoe where overdraft charges would have complicated everything. I had an auto-pay mistake early on (way before I had a cell phone... maybe a student or car loan or something) - so early I can't even remember it. But it taught me not to use auto-pay for anything. At that time I probably knew my account balance to the penny.
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I've been a sprint customer for around 12 years. After experiencing the worst customer service incident of my life in a Sprint (corporate-owned) store, I had vowed to switch to T-Mobile once my contract was up. Even got a phone for it. Why didn't I switch? On an international vacation shortly after, I learned that Sprint now has a default international plan which provides free unlimited slow (3g) data (called Sprint global roaming). Icing on the cake was a $10/month pro-rated plan for unlimited full sp
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I travel internationally almost every month. With T-Mobile any time I'm on a wireless network my phone acts like it's in the US (usually New York City or Chicago). I get free calls to/from the US over whoever the local carrier is. No need for any agreements between them and T-mobile for tower space. My phone knows the WiFi password of almost two hundred restaurants & bars & hotels at this point. The funny part is when I am home - I have Fios, so my calls go over the verizon network rather than the T
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Must be the T-Mobile store next to my friend's Sprint Store. He always helping T-Mobile customers coming over to switch to Sprint.
And the people at the T-Mobile store are probably helping lots of customers who are there to switch away from Sprint. AT&T and Verizon stores are probably pretty much the same.
another 1099 to file (Score:4, Informative)
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Exactly up the alley I was about to post.
There are millions of customers who don't own stock in ANYTHING. And the super-complex tax code in the USA makes having a single share of something a royal pain in the ass. Then you have to file additional forms for earnings and keep track of stuff for capital gains, what its value was when you got it, what it is when and if you sold it... etc. And you will probably get stockholder mailings multiple times a year too, to add to the pile of pseudo-junk-mail. And if
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What "additional forms" are you taking about? You'll file a Schedule D ONCE, when you sell.
If they give out dividends, you'll get a 1099-DIV, which is a simple thing to fill in when you do your taxes.
You can already do paperless notifications, so you don't have "pseudo-junk-mail".
If people don't own stock in ANYTHING, then they're missing out. Putting your money in at least a S&P 500 tracking exchange traded fund and leaving it there for MANY MANY MANY years, is a way to greatly increase one's wealth.
How about they just make the towers near me work! (Score:1)
I use Google Project Fi, which is a MVNO on Sprint AND T-Mobile towers. For the last couple weeks, the T-Mo towers near my home have lacked Internet connectivity, while maintaining a strong 4G signal. The upshot: My phone connects to these towers but I have no mobile data. I've contacted Project Fi about this and they are doing their best, but it sucks right now. Part of the attraction of Project Fi is that it takes the T-Mo coverage map and overlays Sprints, resulting in some pretty good coverage, but
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"You get a share!" (Score:2)
"You get a share! You get a share! Everybody gets a share!"
So how good is this deal? (Score:2)
T-mobile's common stock seems to be selling for $46/share.
Basic service from them costs $50/month. So "First month free" is about the value of this deal...hardly a dramatic benefit.
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T-mobile's common stock seems to be selling for $46/share.
Basic service from them costs $50/month. So "First month free" is about the value of this deal...hardly a dramatic benefit.
Well, you spend $50 one month on your phone bill. What do you have next month? Another bill for $50.
On the other hand, suppose they give you one share worth $50. What do you have next month? Another bill for $50. And one share of T-Mobile stock. Which entitles you to one more vote come election time than people who paid phone bills and got zero shares did. Which isn't much by itself, but there will now be 11 million votes potentially aligned more with customer interests than most companies can brag.
You also
A weird, inconvenient way to give someone $40. (Score:5, Insightful)
For lots of people, this $40 worth of shares is going to be the only stock they own. It's another account to maintain, it's potentially tax implications they don't otherwise have to deal with. For lots of people, it'll be a weird hassle they have to register with their employer. It's also going to be significantly more expensive for the company than just giving out money or discounts. And it doesn't tie you in any meaningful way to the company - if T-Mobile goes up 50%, you're still only up $20. It's not like you have some new meaningful connection to the company's success.
The rational action, on receiving this single stock, would be to sell it immediately, before the "free transaction period" expires and before you forget about it or lose your login or whatever; $40 is a lot better than a weird asterisk in your financial position.
So, in the end, they're giving people $40 in a way that might function like a weird small buyback (as a good chunk of these shares will be orphaned nowhere) - but they're going to spend more than $40/person doing it, and most people are going to get less than $40 of value out of it. But it does make for a novel press release I guess.
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Utterly missing the point (Score:2)
The whole POINT of giving you the share is not that you have $40 more. It's that you feel a deeper sense of belonging to the company, that in turn you are more interested in telling others they should switch to T-Mobile... You literally will own a (very small) part of the company, and can also take place in company votes.
T-Mobile also says... (Score:3)
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I would bet Comcast's sister is fat and ugly.
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You are confusing Price-to-Earnings with Price-to-Book.
Stock price pump (Score:2)
Because one share is not much (too little to sell, really) I think many costumers will end up buying more shares, especially since they already have a connection to the company (own what you know). This might be enough to pump up the stock price beyond what T-mobile could have managed by just buying and retiring shares.
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Because one share is not much (too little to sell, really) I think many costumers will end up buying more shares, especially since they already have a connection to the company (own what you know). This might be enough to pump up the stock price beyond what T-mobile could have managed by just buying and retiring shares.
When a company buys back shares, all of the metrics based on "per share", (e.g. earnings/share), go up because there are now fewer shares.
That increases the value per share.
What T-Mobile is doing keeps the share count unchanged, so all they are effectively doing is giving away cash.
That should actually depress the stock price.
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Forgot to mention another point on buy backs:
If the company issues dividends (TMUS does), a buyback normally increases the dividend/share because the money alotted to the dividend is divided among a smaller pool. That is the other half of why a buyback usually drives stock price up.
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In this case the vast, vast majority of people who receive the stock will never do anything with it, effectively taking it out of the market. So it's kind of a buyback that is hard/weird to compute.
silliness (Score:2)
I think most customers would much rather T-mobile invest this money into upgrading their networks/products or have more attractive offerings. Not saying T-Mobile is a bad company -- there are many aspects to like about them, but this mov
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How much shares? (Score:2)
I am a tmo customer (Score:1)
I have seen pizza stores do very large volume. I am talking like 100 pizza orders. Someone should ask a Dominos store precisely how much capacity they really have because they might be able to do it. However with Dominos they have discretion whether or not they wish to serve customers at the store itself, and many times stores opt out of coupons and offers and that might have happened with T-Mobile. A variety of secret causes including huge orders coming in and the discounted payments per pizza arranged wit