AT&T and Telecom Stocks Tumble as Musk Muscles In

Telecom stocks are having a rough go of it and the stock price reaction doesn’t seem overblown. (Hans Lucas/AFP via Getty Images)

Telecom stocks are tumbling again after the competitive threat in consumer wireless from SpaceX and its Starlink service just got a lot more real.

AT&T stock fell 5.5% in early trading on Friday, with Verizon Communications stock down 3%. T-Mobile US stock fell near 3.8%.

Investors are reacting—poorly—to news that SpaceX aims to secure at least 80,000 cell sites across the US and is in talks with a major infrastructure company to reach that goal, Bloomberg reported, citing anonymous sources.

SpaceX stock was up 2.2% in Friday’s early market.

Telecom stocks are having a rough go of it and the stock price reaction doesn’t seem overblown.

Despite beating expectations for quarterly revenue and earnings on Wednesday, AT&T stock has slid lower because the tea-leaves of its postpaid subscriber numbers suggested competition pressures. SpaceX earnings that outlined Starlink’s ambitions to become the fourth major mobile carrier in the US only hammered the point home.

In recent years, telecom stocks have struggled amid self-destructive price wars between themselves. SpaceX will only make the problem worse, and investors are on edge.

AT&T stock has fallen almost 13% since October 8, just before news hit that SpaceX had agreed to buy a nationwide low-band spectrum license portfolio that would allow Starlink Mobile to become a major telecom operator. Verizon stock is down 6% over the same period and T-Mobile US stock down 12%.

The telecoms have shown signs of fightback, with the big three forming a joint satellite venture and AT&T as well as Verizon taking the battle to lobbying regulators. So far the stock market says it’s not enough.

Write to Jack Denton at jack.denton@barrons.com

参与讨论