T-Mobile, or, as it calls itself, the Un-Carrier, is taking a novel new step in customer incentives: giving away shares of T-Mobile stock to their customers. Called “Stock Up”, the stock offering is just one of many different free incentives being offered by T-Mobile to their customers.
Stock Up is part of T-Mobile’s T-Mobile Tuesdays promotion. You have to download the T-Mobile Tuesdays app (you can get it here for iOS, and here for Android), and then once you install it and verify your T-Mobile account through it, you go to the ‘My Stuff’ section of the app, and claim your stock.
The free T-Mobile stock isn’t the only thing that T-Mobile is giving away on T-Mobile Tuesdays – you can also get free movies, free Domino’s pizza, and free treats from Wendy’s – but it is by far the most interesting.
Free Pizza, Frostys & More from T-Mobile
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“You’re more than just a customer to us,” says T-Mobile on the T-Mobile Tuesday page. “So we’re giving you the biggest thanking of all by making you an owner in the Un-carrier with a share of the company.”
T-Mobile has partnered with brokerage outfit Loyal3 (their motto is “Fee Free Investing. Own What You Love”), and after confirming your T-Mobile account through the app, to claim your stock you will need to set up a Loyal3 account (the app takes you there).
Said T-Mobile CEO John Legere, quoted in an article on CNN, “I’m gonna thank you like you’ve never been thanked before,” adding that “No publicly traded company has done this before, ever. Why should Wall Street be the only ones to benefit our success? You should too.”
It’s an interesting idea, to be sure. In order to set this up, T-Mobile is buying back a million shares of its publicly traded stock, which is the pool of stock from which it will issue the stock to its customers. Of course, T-Mobile has nearly 10 million customers at last count, so what if the demand exceeds the supply?
Stock and investment research and analysis firm Zacks has this to say about it:
“Per the buyback plan, the company has registered 1 million shares under a regulatory filing on Monday. However, with T-Mobile US’ postpaid customer base of 10 million, there is an inherent risk of customers demanding for more than 1 million of such shares. This could stretch the company’s share price for a short period, increasing the cash outflow for T-Mobile US, thereby causing short-term liquidity pressure.
Meanwhile, if the company successfully implements and manages this operation, the buyback activities will drive its shares. Apart from this, an increase in customer count would also be a positive for the stock. Moreover, the cost of executing this plan could be lower than other customer incentive and loyalty plans such as cash credit and payment of termination charges for facilitating customer transition from other carriers. However, a widespread redeeming of stock for cash will exert selling pressure, dragging the stock down.”
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