Sprint stock took off after it emerged that a United States District Court judge has ruled in favor of Sprint Corp’s (NYSE:S) merger with T-Mobile Us Inc (NASDAQ:TMUS), worth a mammoth $26 billion.
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In addition to Sprint’s growth, T-Mobile shares rallied by as much as 10% on the back of the development this morning, and it is almost certain that investors are going to track both these stocks for the rest of the week. While the latest ruling is definitely welcome for the companies, it is still not enough for the merger to go through.
The California Public Utilities Commission needs to approve the deal before the merger can be closed. The two companies have been trying to bring about a merger of this kind for many years, but prior merger talks came to nothing due to the associated regulatory hurdles.
Sprint stock started rallying during after-hours trading on Monday after reports emerged that the judge was likely to rule in favor of the merger. This morning, Sprint stock soared by as much as 72% after the news was confirmed.
Initially, the deal had been given the green light by the Justice Department at the Federal Communications Commission. However, attorney generals from as many as 14 states, including Virginia, California, Massachusetts, and Wisconsin, introduced a lawsuit in an attempt to block the merger.
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Sprint and T-Mobile are the third and fourth biggest carriers in the United States. The lawsuit argued that the merger would hamper competition and eventually hurt consumers, who would have to pay more. The companies, however, argued that the merger would help them in creating an entity that would be able to compete against behemoths like Verizon (NYSE:VZ) and AT&T (NYSE:T).
Investors should keep an eye on the developments in the coming days and track Sprint stock’s progress.
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