AT&T Inc. (NYSE: T) experienced a significant decline in its stock value on Friday, falling 11% to $22.14 at midday. The drop represents the company's largest single-day percentage loss in nearly 26 years. The last time AT&T saw a larger decline was on December 19, 2000, when the company was known as SBC Communications, where it dropped 12.7%.
The market reaction was triggered by news regarding Space Exploration Technologies Corp. (NASDAQ: SPCX). On Thursday, SpaceX agreed to purchase nationwide 800 megahertz spectrum licenses from Grain Management. This deal requires approval from the Federal Communications Commission (FCC).
The acquisition of low-band spectrum is intended to help SpaceX extend its Starlink Mobile service from satellites to the ground. This move positions SpaceX to compete directly with major telecommunications carriers, including AT&T and Verizon Communications Inc. (NYSE: VZ). Verizon shares also fell 11% on the same news.
AT&T CEO John Stankey has addressed the potential competitive threat, stating that satellite direct-to-cell technology is intended to "solve the last 2%, not trying to come up with a new way to solve the 98%."
