T-Mobile prices its public offering of 17.4M shares

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In a press release published this morning, T-Mobile announced the pricing of its registered public offering. The carrier is offering 17.4 million shares of 5.50% mandatory convertible preferred stock at a price of $50 per share. T-Mo hopes to raise around $854 million from the public offering. It’s also giving underwriters the opportunity to buy up to an additional 2.6 million shares of Mandatory Convertible Preferred Stock.

As with any public offering, T-Mobile is planning to use the funds raised to buy more spectrum. T-Mo is clear that this – in no way – relates to the AWS-3 spectrum currently underway.

“Unless converted earlier, each share of Mandatory Convertible Preferred Stock will convert automatically on December 15, 2017, into between 1.6119 and 1.9342 shares of T-Mobile’s common stock, subject to customary anti-dilution adjustments, depending on the market value of T-Mobile’s common stock on that date. Dividends on the Mandatory Convertible Preferred Stock will be payable on a cumulative basis when, as and if declared by T-Mobile’s Board of Directors, at an annual rate of 5.50% on the liquidation preference of $50.00 per share, on March 15, June 15, September 15 and December 15 of each year, commencing on March 15, 2015 and to, and including, December 15, 2017.”

Following news of T-Mobile’s pricing, the stock market responded positively. TMUS is now 0.39% up at time of writing.

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For those Wall Street/Stock market nerds among you, the link to T-Mobile’s announcement is below.

Source: T-Mobile

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  • Makoute

    The market didn’t respond positively, the stock tanked yesterday when the news was rumored.

    • Cam Bunton

      T-Mobile announced that it would sell shares a few days ago, it tanked then. But was climbing this morning after the pricing was announced.

    • tomarone

      “Market response” might mean nothing, like some rich investor decided he/she needed some cash to buy another yacht. Those are dumb comments.

  • Ryan

    Is TMUS not publicly traded? I was just curious about that part, although I guess if they were they wouldn’t need a public offering. But I’m a stock newbie, so it’s possible I just don’t understand it. If someone could help clarify that’d be awesome!

    • k

      It is traded.

    • Kidney_Thief

      Stock sales are a pretty common alternative to financing. In this case, if they sell all 20 million shares, they’ll avoid having to secure $1 billion in financing.

    • Chardog

      If they are offering new shares of stock (versus those already being traded on the open market) then they have to declare that offering officially and set the parameters under which the new shares can be acquired.

  • Jay Holm

    Does any of this have anything to do with TMUS ability to raise funds for the 600mhz auction???

    • Kidney_Thief

      From the press release: “The Company expects to use the net proceeds of the Offering for general corporate purposes, which may include capital investments and acquisition of additional spectrum unrelated to spectrum we may obtain in the Federal Communication Commission’s pending AWS-3 spectrum auction.”

      • Jay Holm

        Ok, sounds good. But TMUS will probably need somewhere around $10-$12 billion in the very least. To get a decent amount of nationwide 600mhz licenses.

        • Kidney_Thief

          There will, in all likelihood, be more stock sales prior to the auction.

  • JaswinderSinghJammu

    $800 million would a drop in the bucket for the 600 MHz auction but every bit helps

  • Joe

    I am new to stock’s so is this good news for their stock or bad cuz yesterday there stock dropped over 8%

  • pbxtech

    Looks like they’re financing more band12 acquisition on the horizon.

    $800M wouldn’t be enough for 600Mhz auction.

    • superg05

      you are likely correct there an article on ……….

  • autumntraveler

    Cam, this is a dilution to all existing shareholders. The market responded yesterday to the announcement, hence a massive drop in share price in the previous trading session.

  • superg05

    THEY SOLD STOCK TO BUY THE NEW STOCK

    • eanfoso

      … No?

  • Gary blimp

    Good lord – get some business education Mr Bunton. Your ignorance and rah-rah are showing a wee bit too much…