As with the other studies the paper cites in its literature review, this particular research design included a window of multiple weeks both before and after the event occured. When analyzing the T-Mobile/Sprint merger decision, we should similarly expand the window beyond just a few hours of after hours trading.After a Judge ruled favorably on the Spint/T-mobile merger, the prices of competitors ATT and Verizon initially increased (within 3 hours), but then decreased when the market had some time to digest what the ruling meant (over the next few days).
In general, an anticompetitive merger that raises price will benefit rivals, while a procompetitive merger that reduces price will harm rivals (substitutes). Because the stock prices of rivals decreased, it supports the hypothesis that the merger would combine their wireless spectra and make them a viable 5G competitor to ATT and Verizon.
TRUTH IN BLOGGING: I worked at the DOJ during its investigation of the merger.