T-Mobile Stock Drops as New CEO Announced. What It Means for Investors.

T-Mobile is getting a new chief executive as Mike Sievert, who has led the company since April 2020, moves to a newly created role as vice chairman.

Key Points

About This Summary

• T-Mobile shares slipped after the announcement that Srini Gopalan will replace Mike Sievert as CEO.
• Gopalan, formerly an executive at Deutsche Telekom, joined T-Mobile in March and is currently COO.
• Analysts believe the transition was expected and do not foresee a major impact on investor sentiment.

T-Mobile stock dropped in premarket trading Monday as the company announced that Srini Gopalan will be the next CEO of the telecommunications giant.

Shares of T-Mobile US were down 0.8% after the opening bell, having traded more than 1% lower in the premarket. The wider S&P 500 was off 0.2%.

Investors were digesting news before the opening bell that Gopalan, the current chief operating officer of T-Mobile, would take the reins from Mike Sievert, who has led the company since April 2020.

Gopalan joined the telecoms company in March and was previously an executive at Deutsche Telekom , T-Mobile’s controlling shareholder.

“T-Mobile is better, stronger and faster today than when Mike took the helm nearly six years ago,” Gopalan said in a statement. “I am so thankful for Mike’s partnership and mentorship and am committed to building on his legacy of putting the customer first—while disrupting the industry—as we continue to scale our winning Un-carrier strategy.”

Sievert will move to a newly created role as T-Mobile vice chairman following the succession.

“It sounds like they will emphasize that the immediate timing is related to a few large upcoming Un-Carrier moves that they want Srini to claim credit for,” analysts at New Street Research wrote in a note following the announcement.

T-Mobile has branded itself as an “un-carrier”—a campaign dedicated to winning over customers from rivals and keeping them satisfied, including with a focus on lower prices, flexible contracts, and 5G rollout.

“The company has gone to pains over the last few months to emphasize that Srini remains focused on being an industry disruptor rather than an incumbent, and we expect them to continue to push that narrative,” the team at New Street Research wrote.

While T-Mobile stock was slipping lower on Monday, the analysts don’t see the news as a major catalyst, especially since investors who have been paying attention would have seen this move coming.

“Investors have been aware that this transition was in the works since early this year, and so we don’t think the news now will impact investors’ thinking about the company,” they wrote.