Why T-Mobile (TMUS) Is Losing Ground Tuesday

NEW YORK (TheStreet) -- T-Mobile (TMUS) shares have skidded 3.1% to $26.14 after announcing it would sell 66.15 million shares, representing around 9% of total shares outstanding.

In a statement, the company said it expects to use the approximate $1.72 billion in capital raised for "general corporate purposes, including capital investments, enhancing its financial flexibility and opportunistically acquiring additional spectrum."

T-Mobile is expected to bid for additional spectrum holdings at a government auction in 2014. Increased spectrum would allow T-Mobile to boost network coverage and capacity to offer a faster and more reliable service.

The fourth-largest mobile service provider has been pushing to gain ground recently. In the third quarter, the company saw strong subscriber growth and 9% higher revenue, as a result of its successful 'Un-carrier' strategy which pitted it as a customer-friendly alternative to rivals Verizon (VZ) and AT&T (T).

As part of the offering, underwriters Morgan Stanley, Goldman Sachs, JPMorgan, Credit Suisse and Deutsche Bank have the option to buy an additional 6.62 million shares.

--Written by Keris Alison Lahiff.

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