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T-Mobile Is Giving Customers Stock In the Company (cnn.com)
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.
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.
Let's not stir that bag of worms...
If they sucked, why is Sprint #4 in the US? And why have they been forced to pull mis-leading ads? It's Sprint that sucks.
The Amarri pray for god, the Caldari pray for profit. the Gallente pray for peace, but the Minmatar pray their ships hol
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 have the potential to be paid dividends if and when dividends are granted, which is more than you'd get from simple payment of your phone bill. If market conditions are favorable, your one share could become worth much more than the one phone bill payment. It could possibly even split, doubling, quadrupling, even octupling. And, if you're just not into the high-flying life of a capitalist, you could always sell the share, take the money and go back to your old, mundane proletarian life. Buy beer or something.