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.

Comments

another 1099 to file

[turkeydance]

turbotax must be smiling

A weird, inconvenient way to give someone $40.

[JMZero]

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.

Re:Only one share...

[Sable Drakon]

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.