This is why T-Mobile CEO Sievert is smiling while some reps and customers are complaining
T-Mobile's shares set another new all-time high on Tuesday with the stock rising as high as $195.93 by Tuesday morning. The wireless carrier's stock has had a strong 2024 rising 20.8% or $33.68 since the start of 2024. Over the last year, T-Mobile stock has surged nearly 40% or $55.70. What is driving the company's value higher to a market cap of over $228 billion is the consistent growth in the number of subscribers, especially net new postpaid phone subscribers.
Because they are more stable subscribers who rarely change carriers and ring up pricey monthly bills for services and equipment, these are the type of subscribers that every major carrier wants to attract. During the second quarter, T-Mobile added an industry-best 7770,000 net new postpaid phone subscribers. T-Mobile also led the industry with $2.9 billion in net income from April through June.
Who is benefiting from the surge in T-Mobile's stock? One person is CEO Mike Sievert. As of today, the executive owns 438,124 T-Mobile shares with an estimated value of $85 million. The largest stockholder is Deutsche Telekom which owns 31.43% of the stock. Typically, stock market analysts like to see a chief executive own a large block of company stock so that the CEO has an incentive to get the business moving in the right direction.
Current T-Mobile CEO Mike Sievert has a reason for smiling. Reps and customers? Not so much.
While the rising stock price might be great for T-Mobile stockholders and its executives, this is actually a problem for T-Mobile reps and customers. We've heard from T-Mobile reps about the lofty metrics for performance and sales that they feel pressured to meet. Some have complained to us that they have witnessed their colleagues committing fraud by adding lines, insurance, cases, chargers, and other accessories to a customer's account without the customer's permission. We've also heard about customers who just wanted to buy a new phone and were told that they could not be sold one unless they also purchased certain accessories.
As T-Mobile shares continue to make new all-time highs, the pressure continues to rise on T-Mobile reps to meet their metrics or find themselves losing their jobs. It is obvious that there has been a sea change at T-Mobile. Under former CEO John Legere, the company's top executive focused on the customer. Under Legere's successor, Mike Sievert, the focus seems to be on the stock.
Why do I say this? Setting metric goals for reps that seem unreasonable and require fraud to meet is done to keep the top and bottom lines growing. And many professional investors look at growth in revenue and net income when deciding which stocks to buy. So while we can congratulate T-Mobile executives and stockholders watching in glee as the company's stock continues to rise, many T-Mobile reps and customers are not happy at all.
FCC OKs Cingular\'s purchase of AT&T Wireless
Things that are NOT allowed: