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T-Mobile Buyback Could Be Fallout From Sprint Deal Collapse

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T-Mobile US ( TMUS ) stock popped Thursday after its chief financial officer said a stock buyback could be announced as soon as December following its failed merger talks with Sprint ( S ).

[ibd-display-video id=2666338 width=50 float=left autostart=true] Braxton Carter, speaking at a Morgan Stanley conference in Barcelona, said T-Mobile's board of directors in late November will consider a "significant" share buyback. Carter previously signaled a possible stock buyback in September at a Goldman Sachs conference.

Parent Deutsche Telekom ( DTEGY ) will not tender any of its shares, Carter added, according to a Reuters report . Deutsche Telekom owns 64% of T-Mobile.

"We estimate a buyback could be in the $5 billion range for 2018 and potentially even higher if Deutsche Telekom chooses to participate (thereby increasing its stake)," Jennifer Fritzsche, a Wells Fargo analyst, said in a note to clients.

"Given its expected ramp in free cash flow, we're not surprised that T-Mobile is pursuing a buyback, but it should be a catalyst to shares which have underperformed since the Sprint deal fell through," Fritzsche added.

IBD'S TAKE:With Thursday's gain, T-Mobile stock is up over 3% in 2017 but down from 67.50 on June 5 when merger speculation involving Sprint heated up. Learn more about T-Mobile and the telecom wireless group atIBD Stock Checkup .

T-Mobile stock jumped 5.5% to close at 59.80 on the stock market today .

T-Mobile has been gaining subscriber and market share from AT&T ( T ) and Verizon Communications ( VZ ) with its "Uncarrier"-branded marketing and price discounts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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