By Aaron Pressman
October 10, 2017

Wall Street is souring on the idea that the Trump administration will go easy on mergers, and that’s hitting one of the most talked about merger candidates right in the stock price.

Shares of wireless carrier Sprint (s) slumped 2% to $7.14 on Tuesday after Deutsche Bank telecom analyst Matthew Niknam cut his price target on the stock to $7 from $8 due to concerns that a merger with a rival carrier would be blocked. Despite renewed rumors of a deal to combine with T-Mobile, Sprint shares have dropped 8% over the past month, even as the S&P 500 Index gained 4%.

Sprint, majority owned by Masayoshi Son’s Softbank Group, has been seen as the one of the most likely merger candidates since Trump was elected. Under the Obama administration, regulators blocked a 2011 deal for AT&T (t) to acquire T-Mobile and signaled a similar outcome was likely in 2014 when Sprint showed interest in combining with T-Mobile. The regulators were concerned that reducing the number of major wireless carriers from four to three could hurt competition and the combination could also lead to massive layoffs.

But Trump’s pro-business stance was at least initially seen as leading to a friendlier outlook from antitrust regulators. Sprint shares jumped from around $6 just before Trump was elected to almost $10 earlier this year on optimism about a possible deal with T-Mobile (tmus).

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Since then, however, the rosy view on mergers has all but disappeared amid the administration’s chaotic tenure and the increasing likelihood that Democrats will make gains in the 2018 election, Niknam wrote on Tuesday, citing “the risk that more populist/less corporate-friendly sentiment may become more pervasive in DC.”

“In fact, we note that the Democrats’ ‘Better Deal’ agenda (unveiled in July 2017, targeted towards 2018 elections) highlights ongoing corporate consolidation as a threat to US consumers, and proposes sharper scrutiny of potential deals,” the analyst added. Regarding Sprint combining with T-Mobile, Niknam said he was “very bearish on the prospects for deal approval.”

T-Mobile, the third-ranked carrier, and Sprint, the No. 4 carrier, have also been discussing a deal that would combine the two carriers without paying Sprint shareholders much if any of a premium over the recent stock price, Bloomberg reported two weeks ago. The deal proposal also would not include a termination fee if blocked by regulators, given the high risk of antitrust opposition, Bloomberg noted.

Cable companies Comcast (cmcsa) and Charter Communications (chtr) that are starting to offer wireless service themselves wouldn’t draw much antitrust scrutiny if they bought Sprint, but now “appear less interested in outright ownership,” Niknam added.

(Update: This story was updated on October 11 to correct that AT&T tried to acquire T-Mobile in 2011)

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