NEW YORK (TheStreet) -- T-Mobile (TMUS) shares are down 5% to $26.79 in trading on Tuesday, continuing the decline that started in after-hours trading yesterday after the mobile telecom carrier announced plans to offer 17,391,305 shares of its Mandatory Convertible Preferred Stock with a liquidation price of $50 per share.
The company said that it would use proceeds from the sale "for general corporate purposes, including capital investments and acquisition of additional spectrum unrelated to spectrum it may obtain in the Federal Communications Commission's pending AWS-3 spectrum auction."
The underwriters of the offering will receive an opportunity to purchase an additional 2.6 million shares of the company's stock, according to the proposal.
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TheStreet Ratings team rates T-MOBILE US INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate T-MOBILE US INC (TMUS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."