Deutsche Telekom stock: 4.77 percent after merger halt
The failed merger plans with T-Mobile US are driving the Telekom share up almost five percent. The group is meanwhile continuing its share buybacks.
Key facts at a glance
- Share price gain of 4.77 percent
- Merger plans with T-Mobile US collapsed
- Share buyback programme continues unabated
- Stock remains below 200-day line
Deutsche Telekom recorded one of the strongest trading days of the year on Monday. The share shot up by 4.77 percent and closed at €28.10. The trigger was a report by the media outlet Semafor, according to which the US subsidiary T-Mobile US no longer wants to pursue its merger plans with the Bonn-based group. The market reacted with visible relief – apparently the previously discussed combination had met with rejection among investors.
Merger plans off the table: share price jumps
The jump in the share price was part of an overall friendly trading day. On Monday, the DAX climbed above the 26,000-point mark for the first time, supported by hopes of a de-escalation in the Middle East conflict and falling oil prices. Alongside Siemens Healthineers, Deutsche Telekom was among the strongest stocks in the leading index. The EuroStoxx-50 also hit a record high on the same day. Against this backdrop, the relief over the failed merger project was particularly pronounced – investors had apparently feared integration risks and financial burdens from a combination, which are now off the table with the retreat. At the same time, warning voices pointed to a fundamentally fragile market situation: weak seasonal patterns, thin summer liquidity and overall high valuations increased the risk of a correction on the stock markets.
Share buyback continues unabated
In parallel with the news flow surrounding the merger, Deutsche Telekom continued its ongoing share buyback programme. As the company announced in a capital market notice, it acquired a total of 1,336,149 of its own shares via the Xetra trading platform in the week from 27 to 31 July. The weighted average price was €27.13, and the total purchase price amounted to around €36.24 million. Since the start of the programme on 1 July, the group has thus already bought back 6,363,064 of its own shares. The pace of buybacks remained constant even in a week with a high density of news – a signal that management remains committed to returning capital to shareholders, regardless of developments in the US merger debate.
Chart analysis: Recovery, but still below long-term average
Despite the recent momentum, the share remains below its long-term trend. Measured against the 200-day average, the stock is still 1.74 percent below it, while it has already clearly exceeded the shorter-term 50-day average. The Relative Strength Index of 60.6 points to noticeable but not yet overheated buying momentum. Over the past 30 days, the share has gained a good ten percent, but has so far remained rather subdued since the start of the year with a gain of just over one percent. The stock is still almost 18 percent below its 52-week high from February, while the distance to the June annual low is significantly larger. Market capitalisation is currently around €129.5 billion.
For investors, this leaves a divided picture: The short-term relief over the cancelled merger project and the record mood on European stock exchanges have given the share a noticeable boost. At the same time, the technical indicators show that the stock is still far from its highs – and the ongoing buybacks suggest that the company itself assumes a solid medium-term valuation.
