This report will be analysing T-Mobile US’s stock for 1st-10th September 2021. All times given are in GMT+0.
T-Mobile US, Inc. (TMUS) is a national wireless carrier in the United States. The company offers consumer, business, and prepaid wireless connectivity options alongside an array of data plans. Incorporated in 2004, it has grown to become the second-largest provider of telecommunication services in the US with 104.8 million subscribers at the end of Q2 2021. It also engages in service, devices and accessories across its flagship brands, T-Mobile, Metro by T-Mobile and Sprint alongside selling devices to dealers and other third-party distributors for resale. TMUS has a market capitalisation of $160.88B and over 75000 employees.
Following small fluctuations until the lead up to February, the stock price opened at $88.18 on 23rd February 2021 and closed at $121.08 on 15th July 2021. The shares of T-Mobile US rose by 13.9% in February itself after clearing the last major hurdle on the way to completing a merger with smaller rival Sprint. After the formation of a bearish candle on 23rd February 2021 due to selling pressure, the price increased till 9th March 2021 until retracing back till 29th March 2021 and rising up again. This resulted in the formation of a bullish flag pattern that led to a further consistent upward pattern owing to the synergies associated with the merger. As it can be seen in the chart, T-Mobile US’s stock fell from the year’s high in July and tumbled in August. The downward trend was amidst a major customer data breach that impacted over 54 million T-Mobile customer accounts. Therefore, the stock price fell from $121.08 on 15th July 2021 to $101.94 on 10th September 2021.
In the days between 1st-10th September 2021, the negative messages were correlated with the movement of the stock price even though there were no significant price movements or gaps in either direction. Having opened at $110.19 on 1st September 2021, the customer data breach and rivalry associated with 5G coverage resulted in the downward trend with the TMUS stock closing at $103.64 on 10th September 2021. As wireless competition has intensified and the predicted integration of 5G in iPhone 13, providers such as Verizon and AT&T have been launching promotions that might result in lower demand for T-Mobile. Dish Network also signed a 10-year network service agreement with its competitor AT&T replacing T-Mobile as Dish’s wholesale partner supporting this trend.
This analysis was performed to determine whether positive messages detected by StockGeist translated into an increase in stock price vice versa for negative messages; specifically for TMUS stock trading in the days between the 1st and the 10th September. Please note that this analysis is not investment advice.
Using StockGeist’s stock sentiment data displayed above, different thresholds were identified to determine whether each hour-long period has a ‘large’ amount of positive or negative messages. A percentage was then calculated to determine the prevalence of stock value fluctuation under the noted threshold. The average hourly price change for that threshold was also calculated, by subtracting the opening price from the closing price. For example, when there were 50% fewer (0.5x) negative informative messages than positive messages, the share price would decrease by 0.17% on average.
The accuracy test indicates the existence of a correlation between the relative number of positive/negative messages and the value of the stock. Negative informative messages in particular the strongest correlation; for example, moving from a threshold of 0.25x to 0.5x provided a 0.03% increase in the magnitude of average hourly price decrease, with accuracy in predicting such drops growing by 5%. Despite this, negative emotional messages – along with their sentiment data – clearly displayed uniform correlation with the average fluctuation of share price. The 100% success rate at predicting stock price decreases in this category can be contextualised by the fact that there was only one data point that satisfied any of the category’s thresholds. This notably low sample size perhaps originates from a combination of the Labor Day Weekend wiping out three days of data due to associated closure of the Nasdaq Stock Exchange.
Beyond this, the accuracy test above displays the same percentage prevalence of stock price increase/decreases for positive informative, negative emotional and positive emotional messages respectively as there were no cases whereby the lower thresholds were satisfied alone (i.e. in all cases where the thresholds of 0.25x and 0.5x were met, the 0.75x threshold was also met). This itself suggests that opinion on the stock was by and large polarised. Moreover, looking back over the raw data allows the insight that there simply existed less sentiment deemed emotional than that deemed informative, perhaps linking to the nature of T-Mobile US as a telecommunications company – a sector that people tend to possess fewer emotional attachments to, when compared to healthcare or consumer products and retail orientated industries. While the positive messages may not have been entirely accurate in determining increases in T-Mobile US’s share price, it is important to remember that this data works best in accord with the additional metrics provided by StockGeist (fundamentals, stock rankings and the word cloud).
At the moment, T-Mobile US’s stock price constantly fluctuates, in part caused by the preliminary realisation of merger synergies, share-swap deals being undertaken by Deutsche Telekom in order to increase their stake in T-Mobile US from 5.3% to 48.4% as well as ongoing rivalry regarding breadth of 5G coverage. While this is all uncertain, this analysis has indicated StockGeist as a useful trader sentiment tool in understanding the direction of the market in real-time, along with which direction the stock is likely to take.