AT&T Falls Nearly 8% as a SpaceX Cell-Site Report Hits Wireless Carriers

AT&T shares dropped 7.96 percent on Friday, closing at $20.93, after a news report revived an old worry on Wall Street: that a satellite operator could build itself into a fourth national wireless carrier. T-Mobile fell almost as hard, down 7.71 percent to a fresh low. Verizon slipped too, by a smaller margin.

A report about 80,000 cell sites

The trigger was a Bloomberg report, published Friday, that SpaceX is in talks to gain access to at least 80,000 U.S. cell sites. Bloomberg attributed the figure to people familiar with the discussions and described negotiations with at least one major owner of tower infrastructure. Neither SpaceX nor the carriers have confirmed a deal. No agreement has been signed. Investors read the report as a credible step toward SpaceX pairing a ground network with its Starlink satellites, which already push into direct-to-phone service, and treated it as a threat to the three incumbents’ subscriber base.

A stock already under pressure

Friday’s slide extended a rough stretch. AT&T has fallen nearly 18 percent over the past 30 days and now trades nearly 22 percent below its 90-day high of $26.72. The close left it just off the floor of that range, 2 percent above its 90-day low of $20.48. Volume was heavy, nearly twice the 20-day average.

The pressure predates the SpaceX report. AT&T reported third-quarter results on October 21 and fell 6.4 percent that day, even though adjusted earnings of $0.65 a share beat Wall Street’s estimate and revenue of $32.3 billion met expectations. Investors focused instead on slower postpaid phone subscriber growth and higher customer churn. Management lifted its full-year earnings forecast into the $2.40 range, but credited the raise mainly to accounting changes tied to its Mexico business rather than stronger core sales. The company did say service revenue rose 3.8 percent from a year earlier, its best showing in more than four years, and it held its free-cash-flow target at $18 billion.

The group moved together. T-Mobile, the purest wireless play of the three, took the full brunt and closed at the bottom of its own 90-day range. It has now dropped nearly 11 percent over the past month and sits 25 percent below its 90-day high. Verizon, less exposed on the day, still finished lower. A single unconfirmed report was enough to erase billions in combined market value.

The next moves are on the FCC’s calendar

The next test comes quickly. The FCC is scheduled to vote on October 29 on proposals to modernize its rules for satellite-to-phone service, including one that would open an additional 482 megahertz of spectrum for it, and a separate step toward auctioning mid-band airwaves for direct-to-device use. These are early-stage proposals. A yes vote would open a public comment period before any rule takes effect.

The earnings calendar fills in the rest. T-Mobile is due to report its own quarterly results later this month, and AT&T’s next report is expected in January. Each will update the subscriber trends the market is now watching most closely.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.