T-Mobile falls 13.3% and tower stocks rise on the SpaceX spectrum deal

T-Mobile US fell 13.3% to $148.58 on Friday and touched a 52-week low, while cell-tower stocks rose, after Space Exploration Technologies, known as SpaceX, agreed to buy a nationwide block of wireless spectrum. About 3.4 times as many T-Mobile shares traded as on a recent average day. AT&T fell 9.8%, and Verizon Communications fell 8.7%.

Reuters reported Thursday that investors fear competition from SpaceX could spark a price war in a U.S. wireless market that is already saturated. AT&T and Verizon are not part of the sale.

Crown Castle, which owns cell towers, rose 15.6%. American Tower rose 9.3%, and SBA Communications rose 7.3%. The Dow Jones Industrial Average rose 0.8%, or 423 points. The State Street SPDR S&P 500 ETF ASPY rose 0.6%.

Already sold, and still down

On Thursday, October 8, Grain Management, an investment firm, said SpaceX will buy its entire nationwide portfolio of wireless spectrum. Spectrum is the licensed radio airwaves a mobile network uses. These airwaves travel farther and pass through walls, a weak spot for phone service that comes from satellites. SpaceX described the purchase as a step into the U.S. mobile market for its Starlink service.

Grain and SpaceX did not announce a price. The Wall Street Journal reported Thursday that SpaceX will pay about $8 billion in cash, citing people familiar with the matter. The Federal Communications Commission still has to approve the sale.

Those airwaves belonged to T-Mobile until August. T-Mobile sold them to Grain for $2.9 billion in cash and spectrum licenses Grain already held. The company had already been paid.

Morgan Stanley analysts said in a note, cited by Reuters on Friday, that any threat is likely to arrive gradually, and first in rural markets.

SpaceX, which trades on the Nasdaq, rose 1.2% to $162.57. "Buying spectrum is not a commitment to build a nationwide network," Bernstein's Madison Rezaei wrote Thursday.

She said the tower companies would be in line for new rental revenue, because a ground network would lease space on towers that already exist. That is a new customer, not a builder taking their place.

The iShares U.S. Telecommunications ETF CIYZ fell 0.7%. Verizon, AT&T and T-Mobile together are about 18% of that fund. Cisco, which makes network equipment rather than selling phone plans, is a larger holding than those three combined.

The iShares U.S. Digital Infrastructure and Real Estate ETF BIDGT, which holds the tower companies along with data-center and equipment stocks, rose 4.2%, less than the tower stocks.

A Medicare score, not a sector move

Humana rose 11.3% to $431.03 after saying that 95% of its Medicare Advantage members are in plans rated four stars or higher for 2027, and that 42% are in 4.5-star plans. The shares touched a 52-week high of $456.50, then closed well below that high.

The Centers for Medicare and Medicaid Services rates these plans from one to five stars. The score sits on a contract, the agreement under which an insurer offers a group of plans.

Four stars or higher brings extra Medicare payments the next year. CMS said the 2027 ratings will affect those payments in 2028. Humana said 18 of its contracts scored at least four stars, up from seven a year earlier.

Alignment Healthcare fell 13.4% to $7.55 and touched a 52-week low. Healthcare Dive reported that Alignment's largest contract fell below four stars, and that the contract covers about three-fourths of its members. Most of its members sit in that one agreement, so they miss the extra payments.

The iShares U.S. Healthcare Providers ETF BIHF rose 1.7%. Humana is about 4% of the fund.

A cancer-vaccine report

Moderna rose 14.2% to $225, a 52-week high, after the New York Times on Friday reported a planned national effort to speed cancer-vaccine development. The effort involves the National Institutes of Health. Stacey Adam, a senior clinical officer at the NIH's foundation, told the Times she expects the program to launch in December.

Nasdaq said on October 1 that Moderna would join the Nasdaq-100 Index, a list of large stocks on that exchange, before Friday's open, replacing Warner Bros. Discovery. On Thursday the stock rose 0.3%, and 37.4 million shares traded, more than on Friday.

Novavax, which is not joining that index, rose 15.8%, more than Moderna.