John Legere, president and chief executive officer of T-Mobile (NYSE: TMUS), may well be one of the most unconventional CEOs out there these days. He prolifically tweets disparaging comments about his rivals, and he has no qualms with crashing their events.
His throw caution to the wind antics could be seen as unbefitting of a leader of a multibillion dollar company. However, it can't be ignored that he has done a bang up job of attracting new subscribers and giving his chief competitors, especially Verizon (NYSE: VZ), AT&T (NYSE: T) and Sprint (NYE: SS), a run for their money.
It's been widely reported that Sprint is in the final stretch of negotiating terms to buy T-Mobile. They are the number three and number four players in the wireless space behind number one Verizon and number two AT&T. They could be more formidable players to compete against the big two if they merge.
There is the question of whether or not federal regulators will allow the acquisition to go through. Officials from the Justice Department and the Federal Communications Commission have made it clear in the past that they want four wireless carriers to rule the space, not three.
Is Legere CEO style the new normal?
Sprint and T-Mobile are still moving forward, reportedly; even determining that Legere should run the new entity. It seems that his antics are acceptable and may very well be the new norm. Examples of his borderline childish behavior include crashing AT&T's developer party, getting kicked out of it, and then tweeting about it. He is indeed a prolific tweeter, taking to the social media site very often to bash his rivals. Take this Legere tweet, for example, which references when the air conditioning system at the San Antonio's AT&T Center broke during the NBA Finals a few weeks back.
"It's bad enough when you can't power a network, but now you can't power the AC during the finals?!?! Come on @ATT!"
While Legere's behavior may run afoul of that of a typical CEO, the market hasn't shunned the company's stock. Since Legere began leading the company in 2012, the stock has been steadily climbing. It's gone from trading around $12 a share in July 2102, before Legere came on board, to its current price of about $33 a share.
That increase of roughly 187% can't be trumped by the top three carriers. AT&T's stock performance has been the worst. It's down 1.7% since July 2012. Verizon's stock is up just 12.3% during this period. Only Sprint comes close, with an increase of 136% in its stock price.
Then there is T-Mobile's subscriber growth. It now has 45 million, which has quickly approached Sprint, which has 54 million subscribers. Still, T-Mobile lags behind leaders Verizon and AT&T by about 50 million subscribers.
Bold moves disrupting the space
The increase in subscriber growth can be attributed to Legere completely going against the grain when it comes to the wireless carrier space. Termed the "uncarrier" approach, T-Mobile's strategy includes everything from getting rid of the lucrative customer contract that used to be the backbone of the industry to paying the termination fees of its rivals' customers to switch to T-Mobile. Also, customers can upgrade their phones within a year of purchasing them instead of having to wait two years or more to do so. This had long stuck in the craw of consumers who are anxious to buy new phones every year. T-Mobile also offers an unlimited data for life for tablets. This flies in the face of other carriers that offer data plans that many consumers deem too expensive.
Even if regulators don't approve the acquisition, Legere's business savvy has still set the company up to come out okay. He was reportedly able to negotiate a $2 billion breakup fee if the deal is not approved or falls through. Sprint, majority-owned by SoftBank, is reportedly ready to fork over $32 billion for the company.
Also, Legere is making offers to buy low-band spectrum from smaller rival, according to the New York Post. The newspaper notes that the spectrum, which T-Mobile lacks, is the key to capitalizing in urban markets like New York City because it penetrates buildings better than the high-band variety.
While I want to see him dial back the antics a bit, his style may very well be the new norm.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.