The short interest in T-Mobile US Inc. (NASDAQ: TMUS) jumped nearly 2.2 million shares (12%) to around 20.2 million shares for the period that ended August 15. That figure is 7% of the total float.
T-Mobile is the darling of the smartphone industry. It posted 1.9 million customer “net adds” in the most recent quarter, impressive in a widely competitive industry. The dark side of that competition is the chance that price and data wars will begin to weigh on margins.
On August 19, 24/7 Wall St. pointed out:
T-Mobile US Inc. (NASDAQ: TMUS) is supposed to be much better than Sprint Corp. (NYSE: S), both in customer additions and financial performance. T-Mobile CEO and President John Legere, the most talkative chief executive in America, reminds the public of those things over and over again. He neglects to mention his share price. Since the start of the year, it is up 20% to Sprint’s 66%.
T-Mobile was also hit by a bad grade in a widely admired piece of research from Rootmetrics:
T-Mobile’s relative national rankings in our testing across the United States were identical to what we found in both the first and second halves of 2015. We’ve noted before that T-Mobile typically performs much better in metro areas compared to state or national levels, and that was again the case in the first half of 2016. While T-Mobile didn’t win any United States RootScore Awards in this test period, the network narrowly trailed AT&T for third place in both our Data RootScore category and our Network Speed RootScore category.
In the nationwide ratings, Verizon’s score was 93.9, AT&T’s 89.9, Sprint’s 85.5 and T-Mobile’s 82.5.
To be fair, T-Mobile has scored better in other research, including the American Customer Satisfaction Index (ACSI).
Good or bad, some relatively large number of short sellers have placed bets against T-Mobile.