Japan’s SoftBank Group (SFTBY) is set to raise roughly $4.9 billion from the block sale of its stake in America’s T-Mobile US (TMUS). Shares of the American telecommunications giant fell 3.9% on the news in after-hours trading yesterday. T-Mobile offers an extensive, low-latency, and powerful 5G advanced network service across the U.S. The company is also expanding its fiber-optic internet footprint, proving to be a strong competitor to traditional broadband providers.
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The Masayoshi Son-led investment conglomerate is offering to sell 21.5 million TMUS shares at a price range of $224 to $228 each. The offer price represents a discount of roughly 3% to TMUS’ closing share price of $230.99 on June 16. The current share sale indicates barely 1.9% of the company’s outstanding shares, suggesting that SoftBank still has ample skin in the game.
SoftBank Unlocks Value from TMUS Investment
Prior to this share sale, SoftBank owned 85.36 million shares of T-Mobile, representing 7.52% of the company and valued at about $22.76 billion. Despite the large stock sale, SoftBank remains T-Mobile’s second-largest shareholder, now owning 5.6% of the company, behind Germany’s Deutsche Telekom (DTEGY). SoftBank originally acquired its T-Mobile shares during the company’s merger with Sprint in 2020.
SoftBank is known for making strategic divestments after major investments in companies. The T-Mobile US stock sale could also be part of SoftBank’s strategy to pivot funds towards more lucrative growth sectors, such as artificial intelligence (AI). The fundraise could help SoftBank enhance its liquidity position and fund new investments in technology and innovation.
Notably, SoftBank is also part of U.S. President Donald Trump’s $500 billion Stargate Project, which aims to build advanced AI hardware, software, and data center infrastructure across the U.S. SoftBank is partnering with ChatGPT-maker OpenAI and software giant Oracle (ORCL) on the Stargate Project.
Is TMUS Stock a Good Buy?
Analysts remain divided on T-Mobile’s long-term stock trajectory. On TipRanks, TMUS stock has a Moderate Buy consensus rating based on five Buys and five Hold ratings. Also, the average T-Mobile US price target of $273.39 implies 18.4% upside potential from current levels. Year-to-date, TMUS stock has gained 5.4%.
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